Amazon.com Inc. shares dropped in after-hours trading after the company missed Wall Street revenue expectations for the third quarter, despite posting its strongest cloud-computing growth in years. The e-commerce and cloud giant reported net income of $15.3 billion, a significant increase from $9.9 billion a year earlier, driven by cost-cutting measures and a resurgence in Amazon Web Services (AWS). AWS revenue grew 19% to $27.5 billion, accelerating from the previous quarter and marking the first growth acceleration in roughly two years as companies resume spending on AI infrastructure.
However, overall revenue of $158.9 billion fell slightly short of analyst estimates of $159.3 billion. The company also warned that fourth-quarter operating income would be lower than expected due to heavy investments in data centers and AI chips. Free cash flow plunged to $4.7 billion from $21.4 billion a year ago, reflecting $22.6 billion in capital expenditures. CEO Andy Jassy emphasized the long-term payoff of AI spending, likening it to the early days of AWS.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing