Amazon Stock Dips on AWS Revenue Miss and Weak Guidance

Amazon (NASDAQ:AMZN) shares fell 3.1% to $184.32 in after-hours trading Thursday after the tech giant reported weaker-than-expected first-quarter revenue from its cloud division, Amazon Web Services (AWS), and issued disappointing guidance for the current quarter.

AWS, central to Amazon’s artificial intelligence strategy, reported Q1 revenue of $29.27 billion, missing Wall Street’s $30.9 billion forecast. The 16.9% year-over-year growth marked the slowest in five quarters, trailing rival Microsoft Azure’s strong performance earlier in the week and raising concerns about Amazon's competitiveness in the fast-growing AI and cloud computing space.

The weaker AWS results overshadowed Amazon’s stronger-than-expected performance in its advertising and e-commerce businesses. Despite those gains, investor sentiment was dampened by the company’s second-quarter operating income forecast, projected between $13 billion and $17.5 billion—below the consensus estimate of $17.7 billion.

Retail, Amazon’s core revenue driver, also faces mounting pressure as U.S.-China trade tensions escalate. The company drew criticism from the White House over reports suggesting it considered notifying consumers of tariff-related price increases. Amazon denied the claim.

The market reaction highlights investor sensitivity to AWS performance, which is viewed as a key pillar of Amazon’s future growth, especially in the competitive AI-driven cloud sector. With cloud competition intensifying and geopolitical risks rising, Amazon faces a challenging path in maintaining momentum across its diverse business segments.

The earnings miss and cautious outlook come at a time when tech giants are under pressure to demonstrate resilience amid global uncertainties, particularly those tied to tariffs and slowing enterprise cloud demand.