Amazon posts 3rd quarter results that fall short of Wall Street’s expectations
Amazon offered a cautious sales outlook for the current fourth quarter that encompasses the critical holiday shopping period after delivering fiscal third-quarter results that came in below Wall Street analysts’ expectations. The Seattle-based tech giant, however, posted strong sales growth in its prominent cloud computing unit. Sales in its so-called Amazon Web Services rose 39.3% to $46 billion…
In Amazon's third quarter results, the company fell short of Wall Street's expectations. Despite strong growth in its cloud computing unit, Amazon's core operations and heavy investments in artificial intelligence weighed on investor sentiment. CEO Andy Jassy projected continued investment in AI, aiming for $220 billion in spending this year.
Amazon's AWS unit, a key driver of growth, saw a 39.3% increase to $46 billion, exceeding analysts' expectations. However, the company reported a $42.4 billion loss in free cash flow over the past year due to significant AI investments. Jassy emphasized the vast potential of AWS, foreseeing 40% annual growth for the next two years and a $1 trillion business within five to ten years.
The company plans to install an AI chip every 14 seconds, matching its rapid deployment pace. Despite concerns over cash burn and the broader AI industry's challenges, Amazon's earnings report highlighted its commitment to expanding its data center footprint and enhancing logistics through AI and robotics. Amazon's investment of over $1 billion over five years aims to support local communities in data center regions, addressing political and public backlash.
The company's net income for the quarter was $20.69 billion, or $1.89 per share, up slightly from the same period last year. Sales rose 12% to $201.94 billion, though the impact of shifting Prime Day timing to the third quarter slightly offset growth expectations.
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