Amazon stock slumped after revenue arrived short of market forecasts

Amazon (NASDAQ:AMZN) stock dropped around 7% in afterhours trade after revealing second-quarter revenue below market expectations.

Revenue for the quarter totalled $147.98 billion, rather than the $148.56 billion predicted by Wall Street analysts.

Earnings per share (EPS) stood at $1.26, beating a market consensus of $1.03.

Amazon’s growth was driven by its data center and cloud services business AWS which generated $26.3 billion in revenue amidst rising demand, slightly better than market expectations for $26 billion, supported by the proliferation of AI-related online services.

Amazon chief executive Andy Jassy talked up the positioning of AWS amidst strong demand for AI-related services.

“As companies continue to modernize their infrastructure and move to the cloud, while also leveraging new Generative AI opportunities,” Jassy said.

“AWS continues to be customers’ top choice.”

The company, meanwhile, pitched guidance for its third-quarter sales in a range of $154 billion to $158.5 billion, which would be an improvement of 8-11% from the previous range – but was shy of a consensus mid-point analyst estimate of $158.24 billion.

Elsewhere, some early commentary of the financial results noted the increasingly stiff competition for Amazon’s core online retail business, coming from Chinese e-commerce rivals Temu and Shein.

In afterhours trade, Amazon stock gave up $12.98 or 7.05% priced at $171.09 – it extended a 1.5% decline in the regular session.