Amazon shares fell in after-hours trading on Thursday after the tech giant reported weaker-than-expected cloud revenue and issued cautious guidance for the current quarter, raising fresh concerns over its artificial intelligence momentum and exposure to trade tensions.
Amazon’s cloud division, Amazon Web Services (AWS), posted first-quarter revenue of $29.27 billion, falling short of Wall Street’s forecast of $30.9 billion.
While AWS revenue grew 16.9% year-on-year, the pace marked its slowest in five quarters and lagged behind Microsoft’s blowout cloud performance earlier in the week.
The shortfall in AWS—central to Amazon’s AI ambitions—sparked investor doubts about the company’s ability to keep pace in the competitive AI race, particularly amid robust growth from Microsoft’s Azure and Meta Platforms’ AI-driven advertising gains.
Shares of Amazon dropped as much as 5% in extended trade, before paring losses to 3.1%, settling at $184.32.
The disappointing cloud numbers overshadowed stronger-than-expected performance in Amazon’s advertising and e-commerce units.
Adding to investor anxiety, Amazon’s second-quarter operating income forecast came in softer than expected, at $13 billion to $17.5 billion, below consensus estimates of $17.7 billion.
Trade tensions further clouded sentiment. Amazon’s retail business, its largest revenue generator, faces mounting challenges amid a renewed US-China trade war.
The company drew criticism from the White House after reports it considered informing customers about the impact of US import tariffs—an idea Amazon has denied.
Despite broader tech sector gains, with Microsoft and Meta shares surging on strong AI earnings, Amazon’s report served as a reminder of the uneven impact of tariffs and AI investment across Big Tech.
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