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Amazon shares drop after soft revenue forecast, but cloud grows

CEO Andy Jassy told analysts that “consumers are being careful on prices.”

8/1/24 7:42PM

Amazon shares took a hit Thursday after hours, dropping 7.6% after the company reported a slight revenue miss and gave sales guidance that was weaker than analysts were expecting.

If that stock decline holds during regular trading Friday, it would knock roughly $130 billion off Amazon’s market cap. The revenue miss was largely a result of sluggish growth in Amazon’s core retail business, which faces competition from Chinese e-commerce companies sending cheaper goods to North American consumers.

“Consumers are being careful on prices,” CEO Andy Jassy said during the earnings call. That led to lower average selling prices, which weighed on sales. The growth rate of units sold in North America outpaced that of sales, meaning a selection of cheaper goods were appealing to consumers.

Meanwhile, Amazon’s big spending on data centers and AI seems to be bearing fruit. Amazon Web Services sales increased 19% year-over-year to $26.3 billion, and the segment generated an operating profit of $9.3 billion, up from $5.4 billion a year earlier.

That helped Amazon to an overall profit of $13.5 billion in the quarter, up from $6.7 billion a year earlier.

Amazon said that customers are bringing both generative AI and non-AI workloads to the cloud.

The strength at AWS it came after Microsoft reported disappointing growth in its Azure cloud-computing business earlier this week. Like other tech companies this season, Amazon had to assure investors it isn’t over investing in AI.

“The reality right now is that while we are investing a significant amount in the AI space and in infrastructure, we would like to have more capacity than we already have today,” Jassy said. “We have a lot of demand right now, and I think it's going to be a very, very large business for us.”

Claire Yubin Oh

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Waymo’s now serving more than 500,000 paid robotaxi rides every week

The Alphabet-owned company grew its ridership more than tenfold in less than two years.

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Judge blocks Pentagon’s move to blacklist Anthropic

A federal judge in Northern California has granted a preliminary injunction blocking the Pentagon from labeling Anthropic as a national security supply chain risk.

The ruling temporarily prevents the Defense Department from restricting the AI company’s access to federal contracts amid a dispute over its refusal to allow certain military and surveillance uses of its technology. The designation could also have shifted lucrative government work toward competitors, including OpenAI.

Earlier this month, Anthropic, the company behind Claude, sued 17 federal agencies and their heads, alleging the government exceeded its statutory authority.

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Report: SpaceX’s record IPO may grant preferential access to retail investors and Tesla shareholders

SpaceX’s impending IPO could raise $40 billion to $80 billion and rank as the largest ever — as well as one of the most unconventional.

The Wall Street Journal reports several ways CEO Elon Musk is considering breaking with IPO norms:

Investors in his other companies, including Tesla, could receive preferential access to shares.
Individual investors may get a third or more of the allocation, far above the typical ~10% mark.
Instead of a traditional road show, Musk wants investors to visit SpaceX facilities in person.

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Investors in his other companies, including Tesla, could receive preferential access to shares.
Individual investors may get a third or more of the allocation, far above the typical ~10% mark.
Instead of a traditional road show, Musk wants investors to visit SpaceX facilities in person.

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Tesla released estimates for Q1 deliveries and they’re lower than analysts expected

Ahead of first-quarter earnings next month, Tesla released its own company-compiled Wall Street consensus estimate for deliveries: 365,645 vehicles. While that’s lower than the 382,000 FactSet consensus estimate, it represents a nearly 9% jump from Q1 2025, when Tesla sold 336,681 vehicles.

Tesla started releasing its own consensus estimates to the public — not just institutional investors — for the first time in Q4 2025. The move was seen as a way to temper investor expectations, as other estimates were too high. Last quarter, Tesla’s compilation was closer to actual numbers, which fell 16% year over year.

The market-implied odds from event contracts suggest 64% of traders think Tesla’s Q1 deliveries will be more than 350,000, 44% think it will be higher than 360,000, and just 21% have it at higher than 370,000.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

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ARC-AGI-3 is the latest version of a clever benchmark that challenges AI models to solve mini video games with no written instructions.

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