Shares of Amazon.com Inc. tumbled over 7% in afterhours trading on Wall Street on Thursday, July 31, despite a strong quarterly performance during the current quarter. However, its operating income guidance for the current quarter left investors disappointed.For the second quarter of 2025, Amazon’s revenue stood at $167.7 billion, a growth of 13% from last year, and higher than the analyst estimate of $162.09 billion. Its Earnings Per Share (EPS) of $1.68 was also well above the $1.33 expectation.
Revenue from Amazon Web Service (AWS) and the advertising business also beat expectations from analysts by a fair margin.
For the current quarter, Amazon said that operating income is likely to be between $15.5 billion to $20.5 billion, with the lower end being well below the analyst estimate of $19.48 billion.
The guidance left investors wanting more as the company has committed to spend over $100 billion on AI this year in building data centers and software. CEO Andy Jassy tried calming frayed nerves by saying that AWS has a “pretty significant” leadership position in comparison to its cloud rivals and that he feels optimistic about his company’s AI offerings.“Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I’m excited for what lies ahead,” Jassy said in the earnings release.
Revenue from Amazon Web Service (AWS) and the advertising business also beat expectations from analysts by a fair margin.
For the current quarter, Amazon said that operating income is likely to be between $15.5 billion to $20.5 billion, with the lower end being well below the analyst estimate of $19.48 billion.
The guidance left investors wanting more as the company has committed to spend over $100 billion on AI this year in building data centers and software. CEO Andy Jassy tried calming frayed nerves by saying that AWS has a “pretty significant” leadership position in comparison to its cloud rivals and that he feels optimistic about his company’s AI offerings.“Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I’m excited for what lies ahead,” Jassy said in the earnings release.
Although AWS did manage to maintain the leadership against its rivals Microsoft Azure and Google Cloud, its 18% revenue growth during the quarter was well below the 39% and 32% that Azure and Cloud respectively reported during the quarter.
Amazon’s advertising business turned out to be the surprise package during the quarter with a 23% growth from last year, which also beat estimates.
Jassy addressed the tariffs issue, saying that the tariffs so far have not dented demand or driven up prices so far. “If costs end up being higher, we will absorb them,” the Amazon CEO said.
If Amazon’s 6.5% fall in extended trading holds during Friday’s session, the stock may slip into negative territory year-to-date.
