Amazon (AMZN, Financial) has projected its operating profit for the current fiscal quarter to range between $14 billion and $18 billion, falling short of analysts' average estimate of $18.2 billion. This shortfall highlights the company's increased spending on artificial intelligence initiatives.
The company anticipates revenue for this fiscal period to reach as high as $155.5 billion, which is below the analysts' average forecast of $158.6 billion. CEO Andy Jassy has been focused on cost-cutting measures and prioritizing Amazon's three core business areas: e-commerce, cloud computing, and advertising.
Jassy is committed to transforming Amazon into a powerhouse for AI products and services. The company is investing billions in data centers and developing proprietary chips designed to handle AI tasks, aiming to compete with industry leader NVIDIA.
Following the earnings announcement, Amazon's stock declined by approximately 3.5% in after-hours trading, closing at $238.82 on Thursday. Despite this dip, the stock has increased by 8.9% this year, following a significant rise of 44% last year.
