Amazon stunned Wall Street with an 8% stock plunge despite beating quarterly forecasts, as its crown jewel—Amazon Web Services (AWS)—posted weaker-than-expected growth. While overall revenue rose 13% to $167.7 billion and profit surged 38% to $18.2 billion, investor focus zeroed in on AWS’s 17.5% growth ($30.87 billion), lagging behind rivals Microsoft Azure (39%) and Google Cloud (32%). Analysts highlighted concerns over Amazon’s sluggish AI race positioning despite heavy data center investments ($31 billion last quarter). Compounding worries, the company’s Q3 operating income guidance of $15.5–20.5 billion fell short of the $19.4 billion consensus, further rattling markets.
Trade Wars Add to Uncertainty
External pressures intensified as new U.S. tariffs (up to 39%) on imports from key manufacturing hubs like India and Switzerland threaten to squeeze margins. Though some analysts remain bullish, raising price targets citing long-term retail strength, Amazon’s cloud slowdown has eroded confidence. The stock’s 7% drop reflects mounting skepticism over its ability to reclaim leadership in the high-stakes cloud and AI battleground.
