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Amazon's cloud unit AWS reports weaker-than-expected earnings development

Investors worried over first-quarter sales outlook

Amazon's retail business offsets cloud weak point with 7% online sales growth

By Greg Bensinger, Deborah Mary Sophia

Feb 6 (Reuters) - Amazon.com investors drove shares down sharply on Thursday due to weak point in the retailer's cloud computing system and lower-than-expected projections for first-quarter income and revenue.

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

Amazon Chief Financial Officer Brian Olsavsky said he expected the capital investment run rate for this year to be approximately the like last year's 4th quarter when the company spent $26.3 billion. Amazon has actually improved spending in particular to help establish artificial intelligence software.

The company's sales price quote for the very first quarter failed to satisfy analysts ´ expectations, even if a negative impact of $2 billion from in 2015 ´ s Leap Day is included. The company said it expects between $151 billion and $155 billion, compared to the average price quote of $158 billion. The cloud system, Amazon Web Services, reported a 19% increase in income to $28.79 billion, disappointing quotes of $28.87 billion, according to data assembled by LSEG. Amazon joins smaller cloud providers Microsoft and Google in reporting weak cloud numbers.

Ceo Andy Jassy said the irregular circulation of computer system chips had actually held back some growth in AWS. "We could be growing faster, if not for some of the constraints on capability, and they are available in the type of chips from our third-party partners coming a bit slower than in the past," he informed investors on a teleconference.

The cloud weakness occurs as financiers have actually grown significantly impatient with Big Tech's multibillion-dollar capital costs and are starving for returns from significant investments in AI.

"After extremely strong third-quarter numbers, this quarter the development rates all missed. That's what the market doesn't desire to hear," said Daniel Morgan, senior portfolio supervisor at Synovus Trust. He said this is especially real after the introduction of new competitors in expert system such as China's DeepSeek. Like its competitors, Amazon is investing heavily in expert system software development. At its yearly AWS conference in December it showed off brand-new AI software application designs that it hopes will draw new organization and consumer customers. Later this month, it is set to release its long-awaited Alexa generative expert system voice service after hold-ups over concerns about the quality and speed, Reuters reported previously today.

Competitors Microsoft and Google moms and dad Alphabet both published slowing cloud growth in last year ´ s 4th quarter, sending shares lower. The companies, along with Meta Platforms, said costs to establish infrastructure for artificial intelligence software contributed to greatly greater awaited capital investment for setiathome.berkeley.edu 2025, a total of around $230 billion between them.

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

Amazon projection operating profit of $14 billion to $18 billion for annunciogratis.net the very first quarter of 2025, missing out on an average expert price quote of $18.35 billion.

The business reported earnings of $187.8 billion in the fourth quarter, compared with the typical expert price quote of $187.30 billion, according to data compiled by LSEG.

Advertising sales, a closely watched metric, increased 18% to $17.3 billion. That compares to the average estimate of $17.4 billion.

Net earnings almost doubled to $20 billion from $10.6 billion a year previously. The Seattle retailer reported incomes of $1.86 per share, compared to expectations of $1.49 per share.

(Reporting by Deborah Sophia in Bengaluru and Greg Bensinger in San Francisco; Additional reporting by Noel Randewich in Oakland, wolvesbaneuo.com California; Editing by Shounak Dasgupta and Matthew Lewis)

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