Amazon (NASDAQ: AMZN) reported stronger-than-expected Q2 results, with earnings per share of $1.68 beating the $1.32 consensus. Revenue came in at $167.7 billion, up 11% year-over-year, supported by solid growth in e-commerce and advertising segments.
Despite the upbeat headline figures, Amazon shares dipped in after-hours trading, as investors focused on weaker-than-expected margins in its cloud division, Amazon Web Services (AWS). AWS revenue rose 17.5% to $30.9 billion—slightly ahead of estimates—but its operating margin fell to 32.9%, missing expectations and fueling concerns over potential loss of market share to rivals like Microsoft Azure and Google Cloud.
The company’s aggressive investments in AI infrastructure also impacted cash flow. Free cash flow hovered near breakeven, below analyst expectations. CEO Andy Jassy highlighted early progress in Amazon’s AI initiatives, including Alexa+, DeepFleet, and Bedrock AgentCore, all aimed at boosting customer experience and operational efficiency.
Looking ahead, Amazon forecast Q3 revenue between $174 billion and $179.5 billion, with operating income projected between $15.5 billion and $20.5 billion. While analysts see Amazon’s performance as solid, it still fell short of the "blowout" results recently posted by peers like Microsoft and Meta, especially in cloud profitability.