Amazon reported a significant increase in quarterly profits for the period of April-June, surpassing analyst expectations. The company earned $13.5 billion, up from $6.7 billion a year earlier. However, Amazon’s revenue forecast for the next quarter fell short of predictions, leading to a decline in its stock price during after-hours trading. Amazon projected sales between $154 billion and $158.5 billion, falling below the analyst forecast of $158.22 billion.
Olsavsky noted that consumers are opting for lower-cost and faster-delivery products, but the distraction from news events has sometimes led them to forgo purchases altogether. He commented, “No matter what you’re selling or providing to a customer base, customers only have so much attention and the things like the Olympics, although they don’t happen that often, we do see different traffic patterns around those events.”Despite the overall revenue shortfall, Amazon’s cloud computing division, Amazon Web Services (AWS), continued to perform well. AWS revenue increased by 19% to $26.3 billion. This strong performance in cloud services came just days after Microsoft’s cloud division, Azure, missed market estimates, raising concerns about Big Tech’s investment in AI.
Amazon says events like Olympics and Trump Assassination Impact on Consumer Spending
Amazon attributed its lower revenue outlook to a distracted consumer base. The company suggested that major news events, including political unrest and the Olympics, have diverted consumer focus from shopping. Brian Olsavsky, Amazon’s finance chief, highlighted this shift, stating, “When high profile things happen, or the assassination attempt a couple weeks ago, you’re seeing that people shift their attention to news.” He added, “This is going to be a tough quarter to forecast.”Olsavsky noted that consumers are opting for lower-cost and faster-delivery products, but the distraction from news events has sometimes led them to forgo purchases altogether. He commented, “No matter what you’re selling or providing to a customer base, customers only have so much attention and the things like the Olympics, although they don’t happen that often, we do see different traffic patterns around those events.”Despite the overall revenue shortfall, Amazon’s cloud computing division, Amazon Web Services (AWS), continued to perform well. AWS revenue increased by 19% to $26.3 billion. This strong performance in cloud services came just days after Microsoft’s cloud division, Azure, missed market estimates, raising concerns about Big Tech’s investment in AI.