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

Investors worried over first-quarter sales outlook

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

By Greg Bensinger, Deborah Mary Sophia

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

Amazon's shares fell as much as 5% in prolonged trade after the fourth-quarter revenues report, erasing about $90 billion worth of stock exchange value, setiathome.berkeley.edu and were last down about 4.2%.

Amazon Chief Financial Officer Brian Olsavsky said he expected the capital investment run rate for clashofcryptos.trade this year to be roughly the same as in 2015's fourth quarter when the business spent $26.3 billion. Amazon has actually improved spending in particular to help develop expert system software application.

The company's sales quote for the very first quarter failed to satisfy analysts ´ expectations, even if an unfavorable effect of $2 billion from last year ´ s Leap Day is included. The business said it anticipates in between $151 billion and $155 billion, compared with the average price quote of $158 billion. The cloud system, Amazon Web Services, reported a 19% increase in profits to $28.79 billion, disappointing price quotes of $28.87 billion, grandtribunal.org according to data compiled by LSEG. Amazon joins smaller cloud companies Microsoft and Google in reporting weak cloud numbers.

Chief Executive Officer Andy Jassy said the inconsistent of computer chips had held back some growth in AWS. "We might be growing faster, if not for some of the constraints on capacity, and they are available in the form of chips from our third-party partners coming a little bit slower than in the past," he informed investors on a conference call.

The cloud weakness occurs as investors have actually grown increasingly restless with Big Tech's multibillion-dollar capital costs and oke.zone are hungry for returns from significant financial investments in AI.

"After extremely strong third-quarter numbers, this quarter the development rates all missed. That's what the market does not want to hear," said Daniel Morgan, senior portfolio manager at Synovus Trust. He said this is particularly real after the introduction of new competitors in expert system such as China's DeepSeek. Like its competitors, Amazon is investing greatly in expert system software application advancement. At its annual AWS conference in December it revealed off new AI software application designs that it hopes will draw brand-new company and customer clients. Later this month, it is set to launch its long-awaited Alexa generative artificial intelligence voice service after hold-ups over issues about the quality and visualchemy.gallery speed, Reuters reported earlier this week.

Competitors Microsoft and Google parent Alphabet both published slowing cloud development in last year ´ s 4th quarter, sending shares lower. The companies, in addition to Meta Platforms, said expenses to develop infrastructure for synthetic intelligence software contributed to sharply higher awaited capital investment for 2025, an overall of around $230 billion in between them.

Amazon's retail business helped balance out the cloud weak point, with the business reporting online sales growth of 7% in the quarter to $75.56 billion. That compared with quotes of $74.55 billion.

Amazon projection operating earnings of $14 billion to $18 billion for the very first quarter of 2025, missing an average analyst estimate of $18.35 billion.

The company reported profits of $187.8 billion in the fourth quarter, compared to the average expert quote of $187.30 billion, according to information assembled by LSEG.

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

Earnings nearly doubled to $20 billion from $10.6 billion a year earlier. The Seattle retailer reported earnings 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 Noel Randewich in Oakland, California; Editing by Shounak Dasgupta and Matthew Lewis)