Amazon's Third-Quarter Earnings Preview: Cloud Business in Focus
Amazon is set to announce its third-quarter earnings after the market closes on Thursday, with a particular focus on its cloud business. Analysts predict that Amazon will report revenue of around $178 billion, a 12% increase from the previous year, and adjusted earnings of $1.95 per share. While e-commerce is a significant part of Amazon's business, investors are keen to see the performance of its AI initiatives, especially in cloud revenue and capital expenditures.
Amazon's cloud growth in the second quarter surpassed expectations but fell short of the impressive results from competitors Microsoft and Alphabet. Both companies recently reported strong cloud revenue figures, setting a high bar for Amazon to meet. Amazon's diverse business portfolio, including e-commerce, logistics, advertising, and cloud computing, provides insight into the financial health of U.S. consumers and businesses. With a market capitalization exceeding $2 trillion, Amazon's stock is a major player in the stock market.
Investors are anticipating potential increases in Amazon's capital expenditures guidance following similar moves by Alphabet and Meta Platforms. Amazon's second-quarter capex exceeded analyst expectations by 25%, and Wedbush analysts project a total capex of $119 billion for the year, indicating growth between the first and second halves of the year. Positive sentiment surrounds Amazon's upcoming report, with expectations of strong growth in Amazon Web Services, robust retail trends, and high demand from advertisers.
Despite its significant market presence, Amazon's stock performance has been relatively subdued compared to its peers, with shares up only 3% since the beginning of the year. Concerns related to tariffs and slower cloud growth have impacted the stock's performance.