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Amazon reported second-quarter revenues of $167.7 billion, exceeding the Zacks Consensus Estimate by 3.32%. Earnings per share of $1.68 also surpassed expectations by 26.32%. Despite this, shares dropped over 7% in after-hours trading, primarily due to concerns surrounding the company’s third-quarter operating income guidance of $15.5 billion to $20.5 billion, which indicates uncertainty about profit margins amidst competitive pressures and significant AI investments.
Amazon Web Services (AWS) revenue grew 17% year-over-year to $30.9 billion, but its operating margins fell from 39.5% to 32.9%. The backlog for AWS sits at $195 billion, a 25% increase year-over-year, reflecting strong future demand, although supply constraints persist. Retail segments also performed well, with online sales at $61.5 billion
The company anticipates capital expenditures to exceed $100 billion in 2025, mainly for AI development, putting near-term profitability in question amidst ongoing macroeconomic challenges impacting consumer spending.
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