Amazon shares slide on disappointing forecast, slowing cloud revenue

Core Viewpoint - Amazon's first-quarter cloud revenue growth disappointed investors, with shares falling as much as 5% in after-hours trading due to lower-than-expected operating income forecasts and slower growth in Amazon Web Services (AWS) [1][2][4]. Group 1: Financial Performance - Amazon Web Services recorded a 16.9% increase in quarterly revenue, amounting to $29.27 billion, which fell short of expectations for 17.4% growth and $30.9 billion in sales [1][4]. - Total revenue for Amazon in the first quarter was $155.7 billion, exceeding analysts' estimates of $155.04 billion [10]. - The company expects net sales for the second quarter to be between $159 billion and $164 billion, compared to analysts' average estimate of $160.91 billion [10]. Group 2: Market Comparison - Microsoft reported better-than-expected results for its Azure cloud unit, highlighting a competitive challenge for AWS, which experienced its slowest revenue growth in five quarters [2][4]. - Analysts noted that expectations for Amazon were elevated following Microsoft's strong performance [4]. Group 3: Operational Insights - CEO Andy Jassy addressed concerns regarding high tariffs on imports from China, which could impact retail prices, stating that there has not yet been a noticeable decrease in demand [5][7]. - Jassy mentioned that there has been some increased buying in certain categories, possibly in anticipation of tariff impacts, but the average selling price of retail items has not significantly increased [7]. - Revenue growth from third-party seller services more than halved to 7% in the first quarter, excluding foreign exchange impacts [7]. Group 4: Advertising Revenue - Amazon reported a 19% increase in online ad sales, reaching $13.92 billion, surpassing analyst estimates and establishing itself as a major player in the advertising market, trailing only Meta and Alphabet [11].