Amazon shares fell on Thursday after the company revealed weaker-than-expected revenue reports for the second quarter. The company said it will continue to maximize spending to meet the demand for artificial intelligence services.
The shares fell by more than 4% in after-hours trading. The reports revealed earnings were $1.26 per share, compared to the $1.03 per share forecasts. The net sales increased by 10% year-on-year to around $148 billion, and revenue amounted to $147.98 billion vs. $148.56 billion expected by LSEG, which was also below expectations.
While the company exceeded its estimates with Amazon Web Services and sales increasing 19% to $26.3 billion, compared to the analyst’s forecast of $26 billion in revenue, on the other hand, advertising made up $12.8 billion vs. $13 billion in revenue, according to StreetAccount.
Although Amazon forecasted net sales of between $154 billion and $158.5 billion, it fell short of the analyst projection of $158 billion.
Amazon’s profit also saw a jump, from $6.75 billion in the same quarter of last year to $13.5 billion.
Finance chief Brian Olsavsky told reporters, “We did come in a little short on revenue growth in North America versus our internal estimates.” He said it was due to customers going for cheaper products.
Olsavsky said that some part of this loss is due to consumers being preoccupied with global events, which makes it a “tough quarter to forecast.”
Moreover, Amazon Chief Executive Officer Andy Jassy has commented on this report, “We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth,”
