Amazon.com Inc. reported its third-quarter earnings on Thursday, with a standout performance from its cloud unit, Amazon Web Services (AWS). AWS posted its highest revenue growth in nearly five years, marking a sixth straight quarter of accelerating sales. Despite this strong showing, investor focus shifted to weaker-than-expected holiday forecasts and a revenue miss, triggering a sharp after-hours selloff. Shares dropped 7% at one point, following a 4.25% decline earlier in the day.
Chief Executive Officer Andy Jassy highlighted the long-term potential of AWS, suggesting it could surpass $1 trillion in annual revenue within five to ten years. His statement underscored the significance of AWS's growth trajectory, which has been consistently outperforming other parts of Amazon's business. However, short-term concerns overshadowed this optimism, as investors reacted negatively to the company's broader outlook.
The contrast between AWS's performance and the market's reaction mirrored similar investor behavior following Alphabet Inc.'s earnings report a day earlier. Analysts noted that while AWS continues to dominate the cloud computing market, broader economic uncertainties and operational challenges are weighing heavily on investor sentiment.