Amazon’s second-quarter sales grew 13% year over year to $167.7 billion, an acceleration from a year ago, when revenue expanded 10%.
For the current quarter, Amazon said it expects operating income to land between $15.5 billion and $20.5 billion. Analysts were looking for $19.48 billion.
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The guidance spooked investors who are eager to see Amazon’s hefty investments in AI pay off. The company has committed to spend up to $100 billion this year on AI as it races to build out data centers and software.
“Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I’m excited for what lies ahead,” Jassy said in the earnings release.
Revenue in the third quarter is forecast to be $174 billion to $179.5 billion, representing growth of 10% to 13% year over year. Analysts surveyed by StreetAccount forecast $173.1 billion in revenue.
The company’s cloud computing unit saw its revenue climb 18% year over year to $30.87 billion in the second quarter. Analysts polled by StreetAccount had expected $30.8 billion.
Amazon Web Services continues to lead the cloud infrastructure market, but it’s facing heightened competition from Microsoft and Google, as the three tech giants ramp up investments to take advantage of the AI boom.
While AWS remains in the top spot, revenue growth of about 18% in the quarter trailed Microsoft Azure and Google Cloud, which recorded growth rates in the latest period of 39% and 32%, respectively.
Amazon’s advertising business was a particularly bright spot in the results. Ad revenue grew 23% year over year to $15.69 billion in the second quarter, beating StreetAccount estimates of $14.99 billion.
Sales in Amazon’s online stores unit grew 11% year over year to $61.5 billion during the quarter, topping Wall Street’s projected $59 billion, according to StreetAccount.
Seller services revenue reached $40.3 billion, which was a 11% year over year increase.
