Amazon shares tumble on weaker-than-expected sales prospects

Shares of Amazon ( AMZN ) fell 5% in after-hours trading Thursday after the company reported third-quarter sales guidance that missed analysts’ estimates.

The company targeted revenue of $154 billion to $158.5 billion for the period, compared with analyst forecasts of $158.43 billion, according to Bloomberg data.

Even as the retail and cloud giant delivered earnings per share (EPS) of $1.26, beating estimates of $1.04 and beating earnings and nearly doubling profits from the same period last year, investors focused instead on the report’s weaknesses.

Amazon generated revenue of $148 billion, slightly less than the $148.8 billion analysts expected, but even the small miss failed to impress.

The company’s thriving advertising segment, which has consistently grown at double-digit rates, continued to show strength, but that segment also came in just short of expectations, posting revenue of $12.8 billion versus the expected $13 billion.

A bright spot in the report came from his cloud company Amazon Web Services. AWS brought in $26.3 billion in revenue, up from $26 billion expected and well above the $22.1 billion in the same period last year.

The report included a flurry of Big Tech results warning that investors have limited patience for massive AI spending. Any weakness in the core business has increased scrutiny on Wall Street.

Amazon’s report came days after its cloud rival and AI competitor Microsoft (MSFT) beat expectations on top and bottom lines but missed on cloud revenue, sending shares down. Before that disappointment, Google parent company Alphabet (GOOG, GOOGL) posted lower-than-expected ad revenue on YouTube, which also sent investors fleeing.

Meta (META), on the other hand, earned Wall Street plaudits, delivering better-than-expected revenue and profit results even as executives warned they expect “significant” capital expenditures in 2025. Shares rose more than 4% on Thursday. Apple (AAPL) also reported profits after the closing bell, alongside Amazon.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance