Amazon shares plunge on weak sales forecast
Photo: Reuters
Amazon saw its shares fall sharply on Thursday, driven by weak performance in its cloud computing division and lower-than-expected revenue and profit forecasts for the first quarter.
Amazon's shares fell as much as 5% in extended trade after the fourth-quarter earnings report, erasing about $90 billion worth of stock market value, and were last down about 4.2%, News.Az reports, citing Reuters.
Amazon Chief Financial Officer Brian Olsavsky said he expected the capital expenditure run rate for this year to be roughly the same as last year's fourth quarter when the company spent $26.3 billion. Amazon has boosted spending in particular to help develop artificial intelligence software.
The company's sales estimate for the first quarter failed to meet analysts’ expectations, even if a negative impact of $2 billion from last year’s Leap Day is included. The company said it anticipates between $151 billion and $155 billion, compared with the average estimate of $158 billion.
The cloud unit, Amazon Web Services, reported a 19% rise in revenue to $28.79 billion, falling short of estimates of $28.87 billion, according to data compiled by LSEG. Amazon joins smaller cloud providers Microsoft (MSFT.O), opens new tab and Google in reporting weak cloud numbers.
Similar news
