From Nasdaq: 2025-02-06 16:55:16

Amazon exceeded revenue expectations in Q4, reaching $187.8 billion, driven by a strong holiday season. However, a 3.5% drop in shares occurred due to underperformance in its cloud unit, AWS. AWS revenue grew 19% to $28.79 billion, slightly missing estimates, highlighting investor concerns about Big Tech’s capital expenditures on AI and cloud infrastructure.

Key points include a 7% increase in online sales to $75.56 billion, an 18% rise in advertising revenue to $17.3 billion, and net income doubling to $20 billion. Earnings per share surpassed expectations at $1.86. The drop in shares erased about $90 billion in market value, reflecting investor caution in the face of cloud growth challenges.

Looking ahead, investors will closely monitor AWS performance to restore confidence. Amazon may balance retail strength with a renewed focus on accelerating cloud growth. The Stargate initiative’s $500 billion investment in AI infrastructure aims to position the U.S. as a global leader in advanced technologies, fostering innovation and economic growth.

Despite retail success, Amazon’s underwhelming AWS growth has raised investor concerns. The challenge lies in sustaining high growth amid significant capital investments in AI and infrastructure. Amazon’s future strategy will likely focus on strengthening its cloud segment while leveraging retail momentum to maintain market leadership.



Read more at Nasdaq: Amazon (AMZN) Outperforms in Q4 Despite Cloud Setback