Amazon slides on light fourth-quarter sales estimates, high cash burn

Amazon.com reported weaker-than-expected fourth-quarter revenue estimates and disclosed a massive cash burn in the third quarter, leading to a nearly 7% drop in shares. The company expects revenue between $240 billion and $247 billion for the upcoming quarter, falling short of analysts' average estimate of $244.51 billion. Amazon's capital expenditure reached $77.26 billion in the third quarter, surpassing estimates by $20 billion, while free cash flow was a significant concern for investors.

CEO Andy Jassy reassured analysts that Amazon's strategy is working, with AWS projected to reach $1 trillion in revenue in as little as five years. The cloud business, particularly Amazon Web Services, has seen strong growth, with a 39% increase in revenue to $46 billion in the third quarter. Despite the earnings disappointment, industry forecasts anticipate a 4.2% increase in holiday sales.