Amazon shares slide on disappointing forecast, slowing cloud revenue

New York Post - May 1st, 2025

Amazon reported a 16.9% increase in its first-quarter cloud revenue, reaching $29.27 billion, which fell short of expectations for a 17.4% growth and $30.9 billion in sales. This disappointing performance in Amazon Web Services (AWS), its cloud unit, caused Amazon shares to drop by as much as 5% in after-hours trading, although they later moderated. In contrast, Microsoft reported exceeding estimates for its Azure cloud unit, indicating a possible shift in market share. Amazon's operating income forecast for the current quarter also came in below analysts’ expectations, which increased investor concerns. CEO Andy Jassy addressed these concerns, noting that while tariffs imposed by President Trump could impact retail prices, there hasn't been a significant reduction in demand yet.

Despite the cloud revenue miss, Amazon's overall performance showed resilience. The company's total first-quarter revenue was $155.7 billion, surpassing analysts’ estimates of $155.04 billion. Additionally, Amazon projected second-quarter sales above expectations, indicating potential stability amid tariff-related uncertainties. Online ad sales were a bright spot, with a 19% increase to $13.92 billion, outperforming analyst projections and positioning Amazon as a significant player in the ad market behind Meta and Alphabet. This mixed performance highlights the competitive pressures in the cloud computing sector and the broader economic challenges Amazon faces, including trade policy impacts and consumer spending trends.

Microsoft Amazon Tariffs E Commerce Aws Cloud Computing Azure Andy Jassy

Story submitted by Fairstory

RATING

7.0

Fair Story

Consider it well-founded

The article provides a comprehensive overview of Amazon's recent financial performance, highlighting both positive and negative aspects. It accurately reports key figures, such as total revenue and AWS growth, while also addressing investor reactions and market challenges. However, the article could benefit from greater transparency in sourcing and more diverse perspectives to enhance its balance and depth. The piece is timely and relevant, addressing issues of public interest, but could further engage readers by exploring the broader implications of tariffs and competition in the cloud market. Overall, the article is well-written and informative, though it could be strengthened by providing more context and analysis on the issues discussed.

Accuracy

The article provides a largely accurate account of Amazon's financial performance and market reactions. It correctly reports the company's first-quarter total revenue of $155.7 billion and AWS's revenue growth of 16.9%, which aligns with external data sources. However, the article could improve by clarifying the context of AWS's growth rate as the slowest in five quarters. Additionally, while it mentions Microsoft's Azure performance, it lacks specific figures or external confirmation that directly links Microsoft's results to investor expectations for AWS. The statements about tariffs affecting retailers like Amazon are plausible but would benefit from more detailed evidence or sources.

Balance

The article is generally balanced, presenting both positive and negative aspects of Amazon's financial situation. It highlights AWS's slower growth and the company's lower-than-expected operating income forecast, which disappointed investors. Conversely, it also notes Amazon's strong performance in ad sales and its reassuring second-quarter sales forecast. However, the piece could provide more perspectives, such as insights from other analysts or industry experts, to enhance its balance and depth. The inclusion of a single quote from Dave Wagner offers some external viewpoint but is limited in scope.

Clarity

The article is well-structured and clearly conveys Amazon's financial performance and market reactions. It uses straightforward language and a logical flow to present its key points, such as AWS's revenue growth and the impact of tariffs. However, the piece could be clearer in explaining the link between Microsoft's Azure performance and investor expectations for AWS. Additionally, providing more context on the tariffs' impact on Amazon would improve clarity for readers unfamiliar with the issue.

Source quality

The article relies on a combination of Amazon's reported data and a quote from an industry analyst, Dave Wagner. While the primary financial data appears to be accurate and likely sourced from Amazon's official reports, the article would benefit from citing additional authoritative sources or providing direct links to the financial reports. The reliance on a single external analyst's perspective limits the breadth of viewpoints and could introduce bias if not counterbalanced with other expert opinions.

Transparency

The article lacks explicit transparency regarding its sources, particularly for the financial data and analyst expectations. It does not specify where the expectations for AWS's revenue growth or the operating income forecast were obtained. Furthermore, the article could improve transparency by explaining how the analyst's quote was sourced or providing more context on the tariffs' impact. Greater transparency in sourcing and methodology would enhance the reader's trust in the information presented.