Fri Aug 01 19:30:00 UTC 2025: **Amazon Q2 Earnings Beat Expectations But Cloud Growth, AI Spending Concerns Trigger Stock Dip**

**Seattle, WA** – Amazon (AMZN) reported second-quarter earnings on Thursday that exceeded expectations in several key areas, including revenue, profits, and retail growth. However, concerns over weaker-than-expected profit guidance, slower growth in its Amazon Web Services (AWS) cloud division, and massive investments in Artificial Intelligence (AI) infrastructure led to an 8% drop in the stock price on Friday.

While Amazon posted a robust 23% increase in advertising sales and projected a promising revenue forecast for the current quarter, investors appeared wary of the company’s significant capital expenditures, which are projected to reach upwards of $118 billion this year, primarily driven by AI development. Competitors like Meta and Alphabet are also pouring billions into AI, raising questions about when these investments will translate into tangible revenue and profit gains.

“It’s very early days in AI development and adoption,” CEO Andy Jassy stated during the earnings call, highlighting the company’s ongoing efforts to monetize AI through initiatives like the upgraded Alexa+ service.

While AWS continues to lead the cloud infrastructure market, its 18% year-over-year growth trailed behind the faster rates reported by Microsoft Azure (39%) and Google Cloud (32%). Analysts questioned Amazon’s leadership about the slower growth, with some expressing concern that AWS is falling behind in generative AI. Jassy defended AWS’s position, emphasizing its significantly larger overall size and taking a jab at Microsoft’s recent security vulnerabilities.

The company seems to be successfully navigating Trump’s trade war. Sales in its online store topped analysts projections and grew 11% year over year, while seller services revenue also beat expectations. The number of items sold in Amazon’s online and physical stores jumped 12%, indicating that the consumer remains healthy despite tariffs and economic uncertainty, analysts at Citizens wrote in a Friday note to clients.

“We just haven’t seen diminished demand, and we haven’t seen any kind of broad scale [average selling price] increases” said Jassy. So that could change in H2. There are a lot of things that we don’t know, but that’s what we’ve seen so far.

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