The share price of Amazon dropped 3.21% in an after-hour trading session on Thursday after the company missed expectations on its first quarter performance.
Amazon recently disclosed its first quarter earnings this year, revealing that its cloud business platform has grown slower and failed to meet the analyst’s expectation again for the third time in a row.
Amazon Web Services accounted for about 19% of Amazon’s total revenue. However, the platform’s revenue this quarter only grew 17% YoY to $29.27 billion, lower than the StreetAccount’s expectation of $29.42 billion and the previous quarter’s growth of 18.9% YoY.
Its top competitor, Microsoft, reported a better result. Revenue of Microsoft Azure cloud grew 33%, ahead of StreetAccount’s anticipation of 30.3%. Meanwhile, Google Cloud revenue reached $12.26 billion, slightly below StreetAccount’s estimation of $12.27 billion.
Beside the revenue, Amazon also shared AWS’s operating income and investment on capital infrastructures. The income’s total figure reached $11.55 billion, ahead of $10.52 billion StreetAccount consensus, while the investment in infrastructure increased 74% YoY to $24.3 billion.
Amazon stated back in February that the company plans to spend about $105 billion this year, with some of it will focus on building data centers that hold powerful chips, capable of training and running Anthropic and other cloud clients’ AI.
Andy Jassy, Amazon CEO and former AWS chief, stated that the AI’s cost will decrease in the future partly due to the use of chips the company developed as an alternative to Nvidia’s chips.
He also mentioned the arrival of more modern chips and AWS’ effort to become less dependent on China’s components in the past six years.
