Amazon.com (AMZN, Financial) shares plunged sharply in extended trading on Thursday following weaker-than-expected growth in its cloud computing division and a disappointing Q1 revenue forecast. The stock fell up to 5% in after-hours trading—erasing nearly $90 billion in market value—before settling at a 4.2% drop. CFO Brian Olsavsky said capital expenditures for 2025 will remain similar to Q4 2024's $26.3 billion as the company continues to invest heavily in artificial intelligence.
The company's Q1 sales projection of $151–$155 billion fell short of the average analyst estimate of $158 billion, even after factoring in a $2 billion negative impact from last year's Leap Day. In its cloud unit, Amazon Web Services (AWS) reported a 19% revenue increase to $28.79 billion—just below expectations—joining competitors Microsoft (MSFT, Financial) and Alphabet (GOOG, Financial) in reporting slowing growth. CEO Andy Jassy attributed part of the slowdown to supply chain constraints affecting chip supplies from third-party partners.
Meanwhile, robust retail performance and solid advertising helped partly offset the cloud weakness, with online sales rising 7% to $75.56 billion and advertising revenue up 18% to $17.3 billion. For Q1 2025, Amazon forecasts operating profits between $14 billion and $18 billion, below the average analyst estimate of $18.35 billion.
