Amazon missed analysts' expectations in both revenue and profit in the third quarter. Revenue reached 201.9 billion dollars, representing a year-on-year increase of 12 percent, but profit fell by 2.4 percent to 20.685 billion. The company's shares weakened by approximately six to seven percent in after-hours trading following the release of the results. El Pais ↗
The results were affected by high costs for building new data centers, also intended for the development of artificial intelligence. Cash outflow over the three months rose to 42.4 billion dollars, nearly six times more than in the previous period. The investments in infrastructure raised concerns among investors about the company's financial condition as well as its ability to prepare for the Christmas shopping season. n-tv ↗
However, the cloud division Amazon Web Services accelerated growth to 39 percent. Amazon is thus benefiting from growing interest in cloud services and artificial intelligence, while at the same time bearing high costs for expanding computing capacity. According to the published results, the company's traditional business areas, including online retail, failed to meet market expectations. seznamzpravy.cz ↗
The drop in shares followed a similar investor reaction to the results of Alphabet. Developments in the coming months will depend mainly on whether growth in the cloud business offsets the costs of artificial intelligence and data center construction. Le Monde ↗
Amazon disappoints expectations as AI investments pressure cash flow
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