Amazon's final quarter of last year exceeded Wall Street expectations, driven by a robust holiday shopping season in its retail sector, with online sales up 7%. However, the company's stock fell by 3.5%, resulting in a loss of about $90 billion in market value, largely due to disappointing results from Amazon Web Services (AWS), which reported a revenue of $28.79 billion—just below estimates. Investors are increasingly concerned about high capital expenditures in technology and artificial intelligence, impacting sentiment across major tech firms, including Amazon.
Amazon's strong retail performance and holiday shopping season offset weaknesses in its cloud unit, though shares fell due to shortfall in AWS revenue estimates.
Despite a strong holiday quarter for retail, investors reacted negatively to the slower growth in AWS, showing impatience with Big Tech capital spending.
Even with a 19% rise in AWS revenue to $28.79 billion, Amazon fell short of analyst expectations, reflecting broader trends in cloud computing.
While Amazon's overall revenue for the fourth quarter reached $187.8 billion, outperforming analysts' estimates, concerns about cloud growth impacted investor sentiment.
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