Amazon's cloud system AWS reports weaker-than-expected profits growth

Investors worried over first-quarter sales outlook

Amazon's retail company offsets cloud weakness with 7% online sales development

By Greg Bensinger, Deborah Mary Sophia

Feb 6 (Reuters) - Amazon.com financiers drove shares down greatly 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 revenues report, eliminating about $90 billion worth of stock market value, prawattasao.awardspace.info and larsaluarna.se were last down about 4.2%.

Amazon Chief Financial Officer Brian Olsavsky said he expected the capital expenditure run rate for bphomesteading.com this year to be roughly the like last year's 4th quarter when the business spent $26.3 billion. Amazon has enhanced spending in particular to assist develop expert system software.

The company's sales quote for the first quarter failed to meet experts ´ expectations, even if a negative impact of $2 billion from last year ´ s Leap Day is consisted of. The company said it expects in between $151 billion and $155 billion, compared to the typical estimate of $158 billion. The cloud system, Amazon Web Services, reported a 19% increase in earnings to $28.79 billion, disappointing estimates of $28.87 billion, according to information compiled by LSEG. Amazon joins smaller cloud suppliers Microsoft and Google in reporting weak cloud numbers.

Ceo Andy Jassy said the irregular flow of computer chips had kept back some development in AWS. "We could be growing much faster, if not for a few of the constraints on capability, and they are available in the form of chips from our third-party partners coming a little bit slower than previously," he told financiers on a conference call.

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

"After extremely strong third-quarter numbers, this quarter the growth rates all missed out on. That's what the market doesn't wish to hear," said Daniel Morgan, senior portfolio manager at Synovus Trust. He said this is particularly true after the emergence of brand-new rivals in expert system such as China's DeepSeek. Like its rivals, Amazon is investing heavily in artificial intelligence software advancement. At its yearly AWS conference in December it showed off brand-new AI software designs that it hopes will draw brand-new company and customer customers. Later this month, it is set to launch its long-awaited Alexa generative expert system voice service after hold-ups over issues about the quality and speed, Reuters reported previously today.

Competitors Microsoft and Google moms and dad Alphabet both published slowing cloud growth in in 2015 ´ s 4th quarter, sending shares lower. The business, together with Meta Platforms, said expenses to develop infrastructure for expert system software contributed to sharply greater awaited capital expenditures for 2025, an overall of around $230 billion in between them.

Amazon's retail organization assisted balance out the cloud weakness, with the business reporting online sales development of 7% in the quarter to $75.56 billion. That compared to quotes of $74.55 billion.

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

The business reported earnings of $187.8 billion in the fourth quarter, compared to 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 average quote of $17.4 billion.

Earnings nearly 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; Additional reporting by in Oakland, California; Editing by Shounak Dasgupta and Matthew Lewis)