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Amazon stock drops 8.3% after disappointing earnings

Investors are concerned as AWS growth trails behind Microsoft and Google Cloud.

August 3, 2025 at 02:52 PM

Amazon Stock Falls 8%. Why, Jassy To-Dos, Why To Skip $AMZN Shares

Investors react to Amazon's slow AWS growth in a competitive AI landscape.

Amazon Shares Drop Following Concerns Over AWS Growth

Amazon's stock tumbled 8.3% after a mixed second quarter earnings report showed growth that failed to impress investors. While total sales for the retail giant reached $167.7 billion, up 13%, the revenue growth of Amazon Web Services (AWS) was less inspiring. AWS saw a 17.5% increase, which was lower compared to Microsoft Azure's 39% and Google Cloud's 32%. CEO Andy Jassy faced criticism for not providing clear explanations regarding AWS's slower growth. Analysts expressed skepticism about Amazon's competitive standing in the rapidly evolving AI market and pointed to potential strategies that could help the company regain momentum.

Key Takeaways

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Amazon's stock fell 8.3% after Q2 earnings report disappointment.

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AWS growth slowed, significantly lagging behind Microsoft and Google.

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CEO Andy Jassy's explanations failed to satisfy investors.

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Analysts suggest urgent overhauls to AWS strategy for growth.

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Competitive pressures in AI require integrated solutions and partnerships.

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Investors are concerned about AWS's ability to capitalize on AI trends.

"Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth."

Jassy remains optimistic about AI's potential, despite current challenges.

"While Amazon’s retail business was firing on most cylinders, AWS growth didn't really accelerate like peers."

An RBC Capital analyst pointed out that AWS's slower growth raises concerns about structural issues.

"Words matter but numbers matter more."

Bernstein analysts emphasize the importance of performance metrics over optimistic statements from leadership.

The decline in Amazon's stock reflects deeper issues within AWS. The company is lagging behind competitors not only in terms of speed but also in innovation within the AI cloud sector. Despite strong overall sales, AWS's struggle to keep up with leading platforms raises concerns about its future performance. Analysts are calling for radical shifts in strategy, emphasizing the need for integrated AI solutions and partnerships; however, such changes may clash with Amazon's corporate culture, which traditionally favors internal development over external collaboration. Jassy's optimism about AI advancements feels detached from the immediate competitive pressure field, suggesting a possible oversight in Amazon's strategic vision.

Highlights

AWS is lagging in the competitive AI race.
Investors are not convinced by Jassy's vision.
Amazon's culture may hinder necessary changes.
The pressure is on Amazon to innovate rapidly.

Concerns over AWS growth create investor unease

The slower growth of AWS compared to competitors raises questions about Amazon's ability to capitalize on AI trends, creating a risk to investor confidence.

Looking forward, Amazon must adapt quickly to reclaim its position in the cloud market.

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amazon aws cloud computing stock market artificial intelligence business technology finance

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