Amazon Cloud Revenue Growth Slows in Q1, Microsoft and Alphabet Show Stronger Results
Amazon’s first-quarter results revealed a deceleration in the growth of its AWS cloud computing business, falling short of expectations and recent gains seen by competitors.
CNBC reported that AWS’s revenue increased by 16.9% year over year to $29.27 billion, slightly below the forecasted 17.4% growth and $30.9 billion in sales. This marked the slowest growth for AWS in five quarters.
Following Microsoft’s robust report, which showed Azure revenue growing by 33% in the same period, expectations were high for AWS. Amazon’s shares initially dropped by up to 5% in after-hours trading but narrowed losses to around 1%.
While total revenue for the quarter reached $155.7 billion, slightly surpassing estimates, investors were particularly focused on AWS performance and the company’s outlook.
Amazon’s second-quarter revenue forecast ranged from $159 billion to $164 billion, compared to analyst expectations of $160.91 billion. CEO Andy Jassy addressed concerns regarding US tariffs on Chinese goods, mentioning an increase in buying activity in specific product categories.
Meanwhile, Microsoft’s cloud unit reported robust growth and signaled continued investment in AI infrastructure. Azure’s revenue growth of 33% included a significant contribution from AI services. Microsoft expects Azure to grow by 34% to 35% in the current quarter.
Alphabet also reported steady performance across its businesses, with first-quarter revenue reaching $90.23 billion, up 12% year over year. Google Cloud revenue rose by 28% to $12.26 billion, with the unit’s margin improving to 17.8%.
In conclusion, while Amazon’s retail and advertising businesses continue to expand, the slower growth in its cloud unit has raised concerns among investors. Microsoft and Alphabet have shown stronger results in adjacent areas, emphasizing the importance of AI infrastructure and cloud services in the tech industry.
(Image by CNBC YouTube)
See also: Amazon stock drops as cloud revenue misses expectations
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