Amazon became the latest Big Tech company to underwhelm Wall Street on Thursday as it reported higher capital spending and shrinking margins even as sales at its closely watched cloud computing business accelerated.
Shares in the Seattle-based company, which have risen more than a third in the past 12 months, slipped as much as 8 per cent in after-hours trading in New York, in an echo of the reactions to recent results from Microsoft and Google-parent Alphabet. Investors have eyed higher artificial intelligence-related spending with caution as they look for signs that the billions going into the technology will produce healthy profits.
Net sales across Amazon rose 10 per cent to $148bn in the three months to June 30, missing analysts’ estimates for $148.6bn. Net income increased to $13.5bn, well ahead of analysts’ forecasts for $11bn.