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Amazon’s Quarter Was a Feast. But the Outlook? A Bit Undercooked.
Amazon (NASDAQ: AMZN) just dropped a Q2 earnings report that looked like a victory lap—until it tripped over its own guidance and faceplanted on Wall Street’s expectations.
Let’s set the table:
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Earnings per share? $1.68 vs. $1.33 expected.
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Revenue? $167.7 billion vs. $162.1 billion expected.
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AWS and Ads? Both beat estimates.
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Stock reaction? Down 7.5% after hours.
Yes, Amazon beat expectations across the board. And then said, “But wait! Our guidance is kinda mid,” and investors immediately hit the eject button.
AI: All-Investment, No Instant Gratification
CEO Andy Jassy hopped on the earnings call with a steady hand and a $100 billion AI pitch. That’s how much Amazon plans to invest across data centers, chips, infrastructure, and tools to “redefine” the customer experience and solidify AWS’s dominance in the AI cloud race.
But investors are clearly wondering:
When does this all start paying off?
The Q3 operating income forecast of $15.5–$20.5 billion was lighter than expected—just enough to shake confidence that all this AI money isn’t just being shoved into a silicon black hole.
AWS: Still King… but Azure and Google Are Sprinting
Amazon Web Services posted $30.87 billion in revenue (+18% YoY), topping expectations.
Sounds great, right?
Except… Microsoft Azure just grew 39%, and Google Cloud clocked in at +32%. AWS is still the market leader, but the other two are throwing elbows—and Jassy knows it. He reassured investors that AWS still has a “pretty significant” lead and that Amazon is “in it for the long game.”
Translation: Calm down, we’re not panicking. Yet.
Advertising: Amazon’s Quiet Powerhouse
Meanwhile, Amazon’s ad business is starting to look like that underappreciated third child who suddenly becomes a doctor.
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Ad revenue: $15.69 billion (+23% YoY)
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Estimates: Crushed ‘em
For context, that’s better ad growth than Google (+10%) and just ahead of Meta (+22%). Amazon is now the world’s third-largest digital ad platform—and you barely hear about it because everyone’s too busy watching Prime.
Retail, Sellers, and Tariff Talk
Even the retail side held its own:
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Online store sales: $61.5B (+11%)
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Seller services: $40.3B (+11%)
As for tariffs? Jassy basically shrugged:
“If costs end up being higher, we’ll absorb them.”
(Investor translation: “We won’t pass it on… until we absolutely have to.”)
So Why Did the Stock Tank?
Because Wall Street is a drama queen with commitment issues.
Despite stellar Q2 results, investors wanted to see proof that Amazon’s massive AI bet is already transforming the bottom line. Instead, they got:
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Decent but cautious Q3 guidance
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Slower AWS growth vs. rivals
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No “aha!” moment from all that AI spending
So while Amazon’s earnings were objectively solid, the stock’s post-earnings slide is Wall Street’s way of saying:
“Great appetizer, but where’s the main course?”
Final Verdict: Don’t Count Out the Everything Store
Amazon might have just had its best quarter in a while—and still got punished. But don’t confuse short-term investor jitters with long-term weakness.
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AWS is still huge.
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Ads are printing money.
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Retail is stable.
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AI investment is high-risk, high-reward.
If you’re a long-term believer in Amazon’s infrastructure dominance, this pullback might just be a Prime buying opportunity.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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