{"id":41088,"date":"2025-08-02T05:14:14","date_gmt":"2025-08-02T05:14:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/41088\/"},"modified":"2025-08-02T05:14:14","modified_gmt":"2025-08-02T05:14:14","slug":"amazon-slides-after-cloud-computing-growth-underwhelms-investors","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/41088\/","title":{"rendered":"Amazon slides after cloud computing growth underwhelms investors"},"content":{"rendered":"<p class=\"c-article-body__text text-pr-5\">Amazon.com (<a href=\"https:\/\/www.theglobeandmail.com\/investing\/markets\/stocks\/AMZN-Q\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/investing\/markets\/stocks\/AMZN-Q\/\">AMZN-Q<\/a>) shares fell 7 per cent on Friday, after growth in its cloud computing unit failed to impress investors, in contrast to the robust gains reported by AI-focused rivals Alphabet (<a href=\"https:\/\/www.theglobeandmail.com\/investing\/markets\/stocks\/GOOGL-Q\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/investing\/markets\/stocks\/GOOGL-Q\/\">GOOGL-Q<\/a>) and Microsoft (<a href=\"https:\/\/www.theglobeandmail.com\/investing\/markets\/stocks\/MSFT-Q\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/investing\/markets\/stocks\/MSFT-Q\/\">MSFT-Q<\/a>).<\/p>\n<p class=\"c-article-body__text text-pr-5\">Amazon Web Services represents a small part of Amazon\u2019s total revenue, but it is a key driver of profit, typically accounting for about 60 per cent of the company\u2019s overall operating income.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cWhile Microsoft and Alphabet have already shown strong momentum in cloud growth, AWS wasn\u2019t the knockout many wanted to see, highlighting just how tightly investor sentiment is tied to the AI narrative right now,\u201d said Matt Britzman, senior equity analyst at Hargreaves Lansdown.<\/p>\n<p class=\"c-article-body__text text-pr-5\">While AWS reported a 17.5-per-cent increase in revenue during the second quarter, sales for Microsoft\u2019s Azure jumped 39 per cent and Google Cloud gained 32 per cent. Profit margin of the Amazon division also contracted.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Big Tech has faced intense scrutiny from investors over the estimated US$330-billion AI spend this year before the latest earnings, with Microsoft on track to potentially outspend its rivals over the next year.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Amazon said its core retail business has largely remained shielded from U.S. President Donald Trump\u2019s tariffs, which have forced many retailers and consumer goods firms to seek ways to protect margins without dampening demand.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThrough the first half of the year, we haven\u2019t yet seen diminishing demand nor prices meaningfully appreciating,\u201d CEO Andy Jassy said on a call with analysts, adding the company was unsure of the tariff trajectory moving forward, especially in China.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThus far, we believe that manufacturers and suppliers are bearing the brunt of the tariff impact,\u201d but the bulk of inventory Amazon sold in Q2 was inbound in Q1, suggesting some room for tariff uncertainty ahead, J.P.Morgan strategists said in a note.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Amazon\u2019s 12-month forward price-to-earnings ratio was at 33.87, compared with Microsoft\u2019s 34.19 and Alphabet\u2019s 18.64, according to data compiled by LSEG.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter.\u00a0<a href=\"https:\/\/www.theglobeandmail.com\/newsletters\/#newsletter-group-3\" rel=\"nofollow noopener\" target=\"_blank\">Sign up today<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Amazon.com (AMZN-Q) shares fell 7 per cent on Friday, after growth in its cloud computing unit failed to&hellip;\n","protected":false},"author":2,"featured_media":41089,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[29361,49,48,285,29362,29363,61],"class_list":{"0":"post-41088","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-computing","8":"tag-amzn-q","9":"tag-ca","10":"tag-canada","11":"tag-computing","12":"tag-googl-q","13":"tag-msft-q","14":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/41088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=41088"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/41088\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/41089"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=41088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=41088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=41088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}