Amazon Stock Earnings: AMZN sags 5% on AWS revenue miss

Amazon stock fell 5% on EPS miss and slowing cloud growth.
Amazon reported net revenue $3.4 billion ahead of forecasts.
AWS grew 20% YoY at the same time that Azure grew 31% YoY.
Support for AMZN stock sits at $101 and $93.

Clay Webster FXStreet

Amazon (AMZN) stock fell 5.1% afterhours on Thursday as the premier online retailer missed earnings per share (EPS) overall for the quarter ending in December and saw growth in its cloud division drop to 20%. The market appeared tired of Amazon's inability or unwillingness to produce significant profits, and AMZN saw foreign revenue drop 8% YoY, although all of that was due to foreign currency exchange rates.

Apple (AAPL) and Alphabet (GOOGL) both saw their share prices drop on flagging earnings reports as well.

Amazon stock earnings news

Amazon produced adjusted EPS of $0.03, 14 cents below consensus from Wall Street. Net income was hurt by a $2.3 billion loss on the value of its stake in electric vehicle firm Rivian (RIVN). Overall net revenue of $149.2 billion was well ahead of expectations for $145.8 billion and rose nearly 9% YoY. However, online net sales of $64.5 billion missed their market by $500 million.

Amazon Web Services, the leading cloud provider, reported sales of $21.3 billion – $460 million below the average forecast. This meant that YoY growth for AWS slowed to 20%, well below the 27.5% reported in the third quarter. This was a bad showing since just last week rival Microsoft (MSFT) reported that its second-place Azure cloud offering saw revenue rise 31% YoY in the quarter ending in December. This means that Microsoft is probably taking more market share for itself, while AWS is beginning to see its 34% market share slide.

"Starting back in the middle of the third quarter of 2022, we saw our year-over-year growth rates slow as enterprises of all sizes evaluated ways to optimize their cloud spending in response to the tough macroeconomic conditions," said CFO Brian Olsavsky.

Source: Amazon

CEO Andy Jassy was undeterred by talk of a slow-down at AWS: “The vast majority of total market segment share in both Global Retail and IT still reside in physical stores and on-premises datacenters; and as this equation steadily flips, we believe our leading customer experiences in these areas [...] will lead to significant growth in the coming years.”

Jassy has received criticism from analysts in the past for skipping out on earnings calls since taking over from founder and former CEO Jeff Bezos in early 2021.

Sales in North America saw a quite impressive 13% rise YoY, but Jassy added that new geographies like India and Turkey were beginning to show results and would help the international division grow in the future.

Amazon stock forecast

AMZN stock dropped 5.1% to $107.18 but traded as low as $105.45 at its nadir afterhours. Interestingly, a brief spike in the share price saw AMZN stock reach $117.38 before again selling off. The 4-hour chart below shows that AMZN is once again stuck inside the $101 to $109.50 demand zone that should act as support. Bulls may seek entry at $101 if they think Thursday's gang of FAANG misses will not lead to a course correction in the market.

Otherwise, if you do think poor quarters for Apple, Amazon and Alphabet will lead to a pronounced sell-off, expect Amazon stock to get pushed down to $93. This price level held up twice in the last third of January.

AMZN 4-hour chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

GBP/USD advaces beyond 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, surpassing 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushed the pair further up ahead of the monthly close.

EUR/USD confortable around 1.1530, highest in six weeks

The EUR/USD pair trades around 1.1530 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Ripple Price Forecast: XRP builds recovery momentum as whales increase exposure

Ripple (XRP) rises toward the pivotal $1.10 resistance on Thursday, marking three consecutive days of gains. This neutral-to-slightly bullish outlook follows the Federal Reserve (Fed) decision to leave interest rates unchanged in the 3.50%-3.75% range.

The FOMC: Rates left on hold; dollar falls as Warsh fails to vote for hike

The Fed kept interest rates on hold today, defying a 30% chance in the Fed Funds Futures market that rates would rise. The Committee voted 9-3 to keep rates on hold, with governors Kashkari, Hammack and Logan all voting to hike rates due to concerns about inflation. The immediate market reaction has been a sharp drop in the USD on a broad basis.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.