Amazon’s cloud unit AWS reports weaker-than-expected profits development

Investors concerned over first-quarter sales outlook

Amazon’s retail company offsets cloud weak point with 7% online sales development

By Greg Bensinger, Deborah Mary Sophia

Feb 6 (Reuters) - Amazon.com investors drove shares down greatly on Thursday due to weak point in the retailer’s cloud computing unit and lower-than-expected forecasts for first-quarter revenue and profit.

Amazon’s shares fell as much as 5% in prolonged trade after the fourth-quarter incomes report, eliminating about $90 billion worth of stock exchange value, and were last down about 4.2%.

Amazon Chief Financial Officer Brian Olsavsky said he expected the capital expenditure run rate for this year to be roughly the like in 2015’s 4th quarter when the company invested $26.3 billion. Amazon has increased spending in particular to help develop artificial intelligence software application.

The company’s sales price quote for the very first quarter failed to fulfill experts ´ expectations, even if a negative impact of $2 billion from last year ´ s Leap Day is consisted of. The company said it expects between $151 billion and $155 billion, compared with the average estimate of $158 billion. The cloud unit, Amazon Web Services, reported a 19% rise in earnings to $28.79 billion, falling short of price quotes of $28.87 billion, according to information compiled by LSEG. Amazon signs up with smaller cloud companies Microsoft and Google in reporting weak cloud numbers.

Ceo Andy Jassy said the inconsistent circulation of computer chips had actually held back some development in AWS. “We could be growing much faster, if not for a few of the constraints on capacity, and they are available in the form of chips from our third-party partners coming a bit slower than before,” he informed financiers on a teleconference.

The cloud weakness occurs as investors have grown progressively impatient with Big Tech’s multibillion-dollar capital costs and are starving for returns from large investments in AI.

“After really strong third-quarter numbers, this quarter the growth rates all missed out on. That’s what the market does not want to hear,” said Daniel Morgan, senior portfolio supervisor at Synovus Trust. He said this is particularly true after the introduction of new rivals in expert system such as China’s DeepSeek. Like its rivals, Amazon is investing heavily in artificial intelligence software application development. At its annual AWS conference in December it displayed brand-new AI software application designs that it hopes will draw new business and . Later this month, it is set to launch its long-awaited Alexa generative expert system voice service after delays over issues about the quality and speed, Reuters reported previously this week.

Competitors Microsoft and Google moms and dad Alphabet both posted slowing cloud growth in in 2015 ´ s fourth quarter, sending out shares lower. The companies, together with Meta Platforms, said costs to develop infrastructure for synthetic intelligence software application added to sharply higher awaited capital investment for 2025, a total of around $230 billion in between them.

Amazon’s retail business helped offset the cloud weakness, wiki.asexuality.org with the company reporting online sales growth of 7% in the quarter to $75.56 billion. That compared to quotes of $74.55 billion.

Amazon forecast operating revenue of $14 billion to $18 billion for the first quarter of 2025, missing out on an average expert price quote of $18.35 billion.

The company reported revenue of $187.8 billion in the fourth quarter, compared with the typical expert quote of $187.30 billion, according to data put together by LSEG.

Advertising sales, a closely viewed metric, rose 18% to $17.3 billion. That compares with the typical price quote of $17.4 billion.

Earnings almost doubled to $20 billion from $10.6 billion a year earlier. The Seattle retailer reported revenues of $1.86 per share, compared with expectations of $1.49 per share.

(Reporting by Deborah Sophia in Bengaluru and Greg Bensinger in San Francisco