Amazon's performance guidance falls short of expectations, leading to a 6% drop in after-hours stock price.
Amazon's third-quarter net profit guidance fell short of analysts' expectations, indicating that the company's spending to meet demand for artificial intelligence services exceeded forecasts. As a result, Amazon's stock price dropped by over 6% in after-hours trading. The company expects operating profit for the third quarter to range between $11.5 billion and $15 billion, while analysts predicted an average of $15.7 billion. Revenue is anticipated to reach between $154 billion and $158.5 billion, reflecting an increase of 8% to 11%, compared to analysts' expectations of $158.4 billion. CEO Andy Jassy has been focused on cost-cutting and enhancing the profitability of Amazon's core online retail operations while investing heavily in artificial intelligence services, which the company describes as a "billion-dollar revenue operating business." Amazon's cloud services division saw sales increase by 19% to $26.3 billion, surpassing expectations, and reporting sequential growth for the second consecutive quarter. However, the strong performance in cloud computing was offset by weakness in Amazon's primary e-commerce segment, with second-quarter revenue from seller services and advertising both falling below expectations.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
