Amazon’s (AMZN) stock sank on Friday after the performance of its AWS unit failed to live up to the hype built up by rivals Google (GOOG, GOOGL) and Microsoft (MSFT).
The tech giant announced its second quarter earnings after the bell on Thursday, beating on the top and bottom lines and offering better-than-anticipated Q3 guidance of between $174 billion and $179.5 billion. Analysts were expecting $173.2 billion.
Still, shares fell more than 8% in premarket trading after Amazon’s guidance for operating income at its AWS cloud computing unit came in at $15.5 billion to $20.5 billion for the third quarter. Wall Street was looking for $19.5 billion.
For the quarter, Amazon reported earnings per share (EPS) of $1.68 on revenue of $167.7 billion. Wall Street was anticipating EPS of $1.33 and revenue of $162.1 billion, according to Bloomberg consensus estimates. The company saw EPS of $1.26 and revenue of $147.9 in the same quarter last year.
AWS revenue hit $30.8 billion versus an expected $30.7 billion. It topped $26.2 billion in Q2 last year.
Rival Microsoft, meanwhile, reported that its Azure business generated $75 billion in fiscal 2025, helping to push its market capitalization past the $4 trillion mark in early trading Thursday. Microsoft is only the second company to reach the milestone behind Nvidia (NVDA).
Google parent Alphabet also saw strong results, noting cloud revenue climbed 32% and backlog, or purchase commitments from customers not yet realized, rose 38%. Search also performed better than expected during the quarter, with sales increasing 12% year over year.
Outside of AWS, Amazon posted online store sales of $61.4 billion.
“The consumer was far more resilient than expected in 2Q, with CEO Andy Jassy saying in May that “we have not seen any attenuation of demand at this point,” Wedbush analyst Scott Devitt wrote in a note to investors ahead of earnings.
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