AMZN: Amazon Stock Tanks 7% as Weak Guidance Casts Shadow Over Earnings Beat

Ecommerce and cloud computing giant delivered a double beat but said that operating profit for the current quarter might not be where investors want it to be.

💰 Big Sales, Big Profits

• Amazon delivered a textbook double beat on second-quarter earnings and revenue late Thursday evening. But it wasn’t enough to impress investors already hooked on growth.
• Despite a strong quarterly showing, Amazon stock AMZN tumbled almost 7% in after-hours trading as Amazon’s third-quarter operating profit forecast came in shy of expectations — a warning bell in this hypersensitive tech earnings season.
• Amazon reported second-quarter revenue of $167.7 billion, up 13% from the year-ago quarter and beating the Street’s $162.19 billion target.

☁️ AWS Stays Strong — But Margins Slip

• The company pushed hard on capital expenditures, dropping $32.2 billion, an 83% year-over-year jump, as it races to scale its AI infrastructure. Revenue from Amazon Web Services (AWS), the company’s cash cow, climbed 17.5% to $30.9 billion, slightly ahead of expectations.
• Demand for AI compute and training workloads was called “unprecedented” by executives — and spending reflected that. However, AWS operating margins shrank to 32.9%, down from 35.5% a year ago, a potential red flag for profitability hawks.

📉 Weak Outlook Sends Stock South

• Amazon’s third-quarter operating income forecast of $15.5 billion–$20.5 billion landed mostly below Wall Street’s $19.5 billion consensus.
• Sales guidance was stronger, with projected revenue of $174 billion–$179.5 billion versus the expected $173.3 billion — but it wasn’t enough to offset profit concerns.
• The stock reaction underscores how elevated expectations for AI and cloud giants have become — and how even a small misstep may hit hard.