(Nathan Stirk/Getty Images)

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.”

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Prediction markets have, predictably, been given a boost by the summer of sports

Major platforms like Kalshi and Polymarket have seen huge upticks in users of late, thanks in no small part to what’s felt like a recent sporting smorgasbord, with major competitions across hockey, basketball, and soccer soaking up fans’ time (and spending, clearly) at the outset of summer.

While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

2026 World Cup Reverses Seasonal Lull for Sports Betting Apps

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5