Amazon’s profits are here, but they don’t look good for the stock price.
Investors focused on the company’s projected annual capital spending of $200 billion, well above the average analyst estimate of $146.11 billion.
This cast a shadow over the report, which was otherwise mostly in line with expectations. Net sales were $213.39 billion, compared to expectations of $211.49 billion. The AWS cloud sector, which the company is focusing on, also performed slightly better than expected.
Earnings per share came to $1.95, slightly below expectations of $1.96. As for the outlook, Amazon expects net sales to range from $173.5 billion to $178.5 billion, in line with Wall Street’s estimate of $175.54 billion.
Heading into earnings, Wall Street will be focused on the prospects for further growth in the AWS cloud division. Like other AI-focused companies, it will be paying close attention to the latest information on AI-related capital investments and costs, following a recent wave of company-wide layoffs.
Shares fell sharply in after-hours, down about 8% after falling 5% during Thursday’s trading.
A conference call for analysts will begin at approximately 5:00 p.m. ET.
