Amazon's first-quarter results revealed a 16.9% growth in its cloud revenue, missing expectations and marking the slowest pace in five quarters. Despite rival Microsoft surpassing its Azure estimates, Amazon's forecast for operating income fell short at $13-$17.5 billion against an expected $17.7 billion. Concerns over high tariffs were addressed by CEO Andy Jassy, who indicated that while demand remains strong, retailers are preparing for potential price increases. The growth in revenue from third-party seller services also slowed significantly, contributing to a cautious outlook amid competitive pressures and market uncertainties.
It's always felt like AWS and Google Cloud were taking the most share for quite some time, but maybe that's starting to turn because Microsoft posted great numbers.
We haven't seen any attenuation of demand yet. We've seen some heightened buying in certain categories that may indicate stocking up in advance of any potential tariff impact.
We also have not seen the average selling price of retail items appreciably go up yet, noting that sales of lower-cost essentials were rising steadily.
Operating income for the current quarter would be between $13 billion and $17.5 billion, compared with the average estimate of $17.7 billion.
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