Amazon did not ease worries about how Donald Trump’s extensive tariffs could impact its online retail business as it released its latest quarterly results on Thursday. Investor enthusiasm for the tech company wavered in response.
Amazon’s second-quarter earnings surpassed Wall Street’s predictions. The company reported a 13.3% year-over-year increase in revenue, reaching $167.7bn, exceeding market expectations of $162bn and 9% growth. Its cloud computing division, Amazon Web Services, saw sales rise 17.5% to $30.9bn compared to the previous year.
However, the company’s operating income forecast fell short, with an expected range of $15.5bn to $20.5bn, below the anticipated $19.4bn.
Despite strong revenue figures, Amazon’s stock dropped more than 3% in after-hours trading, reflecting investor doubts about its near-term outlook.
Before Thursday’s earnings report, Amazon’s stock had climbed roughly 6% year-to-date, recovering from a difficult first quarter when concerns over Trump’s tariffs weighed on its dependence on global sellers. The administration had also criticized Amazon in April after reports suggested the company might label tariff-related price hikes on its platform. No such labels appeared.
Amazon’s earnings report arrived amid fierce competition among major tech firms to lead in artificial intelligence. Companies like Google, Meta, and Microsoft are investing heavily in advancing AI technology, while Amazon plans to spend $100bn in 2025, mostly on AI development.
CEO Andy Jassy highlighted Amazon’s AI investments in a statement, emphasizing that AI has been incorporated into many of its products and operations.
“Our progress in AI is enhancing customer experiences, speeding up innovation, improving efficiency, and driving business growth. I’m optimistic about the future,” Jassy said.
Amazon has allocated billions toward expanding its data centers, boosting its cloud services and generative AI efforts. In June, it committed $20bn to build two facilities in Pennsylvania, described by Governor Josh Shapiro as the state’s largest private investment. Another massive facility in Indiana, spanning over 1,200 acres, will house at least 30 data centers.
The company has also partnered with Anthropic, a leading AI startup, to strengthen its position in the AI sector and integrate the technology across its services. Amazon has already invested $8bn in the startup and may make further commitments.
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