Amazon Shares Sink Over 5% on Earnings Miss, Softer Than Expected Q4 Sales Guidance

Amazon reported net sales of $201.9 billion and a profit of $1.95 per share, falling short of analysts' expectations for $202.26 billion in sales and a $1.96 per share profit. The company's fourth-quarter net sales guidance of $240 billion to $247 billion also missed expectations. Shares dropped over 5% in after-hours trading. The tech giant's net sales grew 12% to $201.9 billion and profit increased to $20.7 billion, or $1.89 per share.

The weaker-than-expected guidance for the fourth quarter was due to a negative impact from foreign exchange rates. Operating income for the quarter was expected to be between $28.5 billion and $33.5 billion, while ad revenue growth was projected to be in the high-teens. Amazon expects to spend $220 billion on capital expenditures, with the majority going toward artificial intelligence and Amazon Web Services.

Advertising services revenue rose 12% to $19.64 billion, though growth was hindered by timing issues linked to Prime Day. AWS sales increased by 39% to $46 billion. Net sales in the subscription services segment grew 12% to $14 billion. Amazon announced new AWS agreements with major companies such as Meta, Nvidia, OpenAI, Salesforce, Oracle, Qualcomm, and Verizon, and launched its AI-powered Ads Agent to assist advertisers.

Prime Video featured the fifth season of Thursday Night Football, the second season of the NBA, and "Reacher" Season 4, which drew over 66 million viewers in its first 28 days. Prime Video will host the Emmys starting in 2027, bringing the telecast to more than 240 countries for $15 million per year.