Amazon tumbles after cloud computing growth disappoints investors
Amazon Web Services, long the cloud-computing market leader, edged past Wall Street estimates for June-quarter revenue on Thursday with a 17.5% increase, but it widely lagged the 39% growth seen at Microsoft Azure and Google Cloud's 32% gain.
That disappointing growth came even as Amazon shelled out $31.4 billion in capital expenditure, more than rivals, and suggested it would spend a more-than-estimated $118 billion for the year.
Google and Microsoft also pledged higher spending, but were rewarded from investors on signs AI was already becoming a major growth driver across their businesses, justifying the bill.
The companies have been spending billions of dollars on datacenters and cutting-edge chips that they say are necessary to overcome supply constraints hampering their efforts to capitalize on soaring demand for AI services.
"The spotlight was firmly on AWS and it didn't quite shine as brightly as expected," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "While Microsoft and Alphabet have already shown strong momentum in cloud growth, AWS wasn't the knockout many wanted to see."
Growing expenses have also started to take a bite out of AWS's margins, the business that has long been Amazon's profit engine, accounting for about 60% of its operating income.
AWS margins contracted to 32.9% during the quarter, their lowest level since the final quarter of 2023, and Amazon also issued a current-quarter total operating income forecast that was lower than market estimates.
CEO Andy Jassy told analysts on a post-earnings call that it was still "very early days" in the AI race and that Amazon's massive cloud business, much larger than rivals, was primed to perform well once the AI capacity constraints start to ease.
The stock, now down 1.5% for the year, was at $216.2 in late morning trading. The drop was set to erase around $170 billion from Amazon's market value, if the losses hold.
The company still trades at a relatively high premium, with a 12-month forward price-to-earnings ratio of 33.87, compared with Microsoft's (MSFT.O), opens new tab 34.19 and Alphabet's (GOOGL.O), opens new tab 18.64, according to data compiled by LSEG.
At least 30 analysts raised their price targets on the stock, while three lowered, giving it a median view of $260.
Some of that analyst confidence comes from the strong performance of Amazon's retail business, which has remained resilient in the face of Trump administration tariffs that have hobbled many retailers and their supply chains.
Amazon has yet to see a drop in demand or a notable rise in prices in the first half of the year, Jassy said, as its online store sales jumped a better-than-expected 11% in the second quarter.
Manufacturers and suppliers have shouldered most of the tariff impact so far, analysts said, but noted that much of the inventory Amazon sold in the quarter arrived in the preceding three-month period.
"If Amazon's retail business was a standalone entity, it would be trading dramatically higher following the near-perfect results," said Michael Morton, analyst at MoffettNathanson.
"Unfortunately, as we all know, the success of the retail business is not what's going to matter in the near term for Amazon's stock price."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Geeky Gadgets
29 minutes ago
- Geeky Gadgets
Create Entire TV Shows With Showrunner AI : The Future of TV and Animation?
What if your next favorite TV show wasn't written by a team of seasoned writers, animated by a studio of skilled artists, or acted out by Hollywood's brightest stars? Instead, imagine it being crafted entirely by an AI—a digital showrunner capable of scripting, animating, and producing a fully realized series with nothing more than a few text commands. Bold claim? Perhaps. But platforms like Showrunner, developed by Fable, are already turning this vision into reality. With the backing of industry giants like Amazon, this AI-powered storytelling tool is not just a futuristic concept—it's here, and it's poised to disrupt the entertainment industry as we know it. In this feature, Wes Roth explores how Showrunner is reshaping the creative process, offering tools that empower anyone—from hobbyists to seasoned professionals—to create high-quality animated TV shows with minimal resources. You'll discover how its intuitive text-based interface simplifies complex tasks like scriptwriting, character design, and scene composition, and why its collaborative ecosystem is sparking a new wave of community-driven storytelling. But as this new technology provide widespread access tos content creation, it also raises provocative questions about the future of traditional media roles. Is this the dawn of a more inclusive creative era, or the beginning of an AI-driven upheaval in entertainment? Let's unpack the possibilities. AI Transforms TV Creation How Showrunner Operates Showrunner functions through a text-based command interface, allowing you to design scenes, characters, and storylines with remarkable ease. This streamlined system simplifies the traditionally intricate processes of animation and scriptwriting. By entering specific commands, you can define character actions, dialogue, and even camera angles, allowing you to bring your creative vision to life. The platform's intuitive design ensures accessibility, offering professional-grade results regardless of your experience level. This makes it an invaluable tool for both aspiring creators and seasoned professionals looking to experiment with new storytelling methods. Core Features and Creative Potential Showrunner offers a comprehensive suite of features designed to enhance storytelling and empower creators. These include: Customizable animated characters with unique voices, appearances, and backstories, allowing for diverse and engaging narratives. with unique voices, appearances, and backstories, allowing for diverse and engaging narratives. Advanced editing tools that let you refine dialogue, adjust tone, and perfect scene composition to align with your creative goals. that let you refine dialogue, adjust tone, and perfect scene composition to align with your creative goals. Collaborative capabilities that enable real-time interaction with other creators, fostering a dynamic and interactive creative process. that enable real-time interaction with other creators, fostering a dynamic and interactive creative process. Community-driven content creation, where users can share, learn from, and build upon each other's work, creating a vibrant ecosystem of ideas. The platform supports a wide array of genres, offering flexibility for creators to explore various storytelling styles. Its debut series, Exit Valley, features satirical portrayals of public figures such as Elon Musk and Donald Trump, showcasing its potential for humor and social commentary. Upcoming themes, including Western and sci-fi settings, further expand the creative possibilities, making sure that users can tailor their projects to suit their unique visions. Showrunner AI Creates Entire TV Shows! Watch this video on YouTube. Unlock more potential in AI content creation by reading previous articles we have written. Accessible and Collaborative User Experience To begin using Showrunner, you need to familiarize yourself with its basic commands on Discord. While this may present a slight learning curve, the platform's collaborative environment makes the process more approachable. By observing and engaging with other users' creations, you can quickly adapt and refine your own projects. This shared space fosters a sense of community, encouraging experimentation and innovation. The platform's design lowers the barriers to entry for aspiring creators, making professional-quality content creation more accessible than ever before. Transforming Media Production Showrunner's ability to provide widespread access to storytelling tools has led to comparisons with platforms like Netflix, earning it the moniker 'Netflix of AI.' By providing professional-grade tools to individuals with limited resources, it amplifies the diversity of voices in media production. However, its rise also prompts critical discussions about the future of traditional media roles. Will AI-driven platforms like Showrunner replace human writers, animators, and actors, or will they serve as complementary tools that enhance the creative process? These questions highlight the broader implications of AI in reshaping the entertainment landscape. Amazon's Strategic Role Amazon's investment in Fable underscores the growing recognition of AI's fantastic potential in the entertainment sector. This financial backing not only validates Showrunner's capabilities but also positions it for further development and scalability. As the platform evolves, it could become a cornerstone of AI-driven media production, influencing how stories are created, shared, and consumed. Amazon's involvement signals a broader industry shift toward embracing AI as a critical tool for innovation in storytelling. Precision Editing and Customization One of Showrunner's most notable features is its precision editing tools, which provide granular control over every aspect of your project. You can fine-tune scripts, adjust character actions, and modify scenes to align perfectly with your creative vision. This level of customization ensures that every detail contributes meaningfully to your narrative. Whether you are a novice creator exploring new ideas or an experienced professional seeking to push creative boundaries, Showrunner offers the flexibility and control needed to bring your stories to life. Shaping the Future of Storytelling Showrunner represents a significant advancement in AI-powered content creation. By offering an accessible yet robust platform, it enables you to produce high-quality TV shows with unprecedented ease. Its potential to disrupt traditional media industries is matched by its ability to create new opportunities for creators worldwide. As AI continues to redefine the entertainment landscape, platforms like Showrunner are poised to play a pivotal role in shaping the future of storytelling, allowing a more inclusive and innovative era of content creation. Media Credit: Wes Roth Filed Under: AI, Top News Latest Geeky Gadgets Deals Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
Geeky Gadgets
29 minutes ago
- Geeky Gadgets
iOS 26 Beta 5 is Almost Here: Here's What to Expect
Apple is gearing up to release iOS 26 developer beta 5 alongside public beta 2, bringing a host of updates aimed at enhancing performance, extending battery life, and introducing practical new features. These updates are designed to refine your interaction with Apple devices, making sure they are more efficient, reliable, and user-friendly. Below is an in-depth look at the key updates and their potential impact on your daily experience. The video below from iDeviceHelp gives us more details. Watch this video on YouTube. Bug Fixes and Performance Enhancements A primary focus of iOS 26 beta is addressing persistent bugs and improving overall system reliability. These updates are essential for making sure smoother operation across Apple devices, particularly in areas where users have reported recurring issues. Key improvements include: Phone App Stability: Frequent issues such as app crashes during calls, errors with the hold assist feature, and inaccuracies in voicemail transcription have been resolved. These fixes ensure a more seamless communication experience. Frequent issues such as app crashes during calls, errors with the hold assist feature, and inaccuracies in voicemail transcription have been resolved. These fixes ensure a more seamless communication experience. System Performance: General stability enhancements reduce unexpected interruptions, making your device more dependable for everyday tasks like messaging, browsing, and app usage. Battery optimization is another critical area of focus. Apple has refined its power management algorithms to extend battery life, allowing your device to handle power-intensive activities like streaming, multitasking, and navigation more efficiently. These improvements aim to reduce the frequency of charging, making sure your device remains functional throughout the day. New Features to Watch iOS 26 beta introduces several innovative features designed to integrate seamlessly into your lifestyle. These updates reflect Apple's commitment to enhancing convenience and functionality: Adaptive Temperature Integration: This feature works in conjunction with HomeKit and App Maps to automatically adjust your home's thermostat settings based on your location. For instance, if you're returning home on a cold evening, your thermostat can preheat your living space for added comfort, making sure a welcoming environment upon arrival. This feature works in conjunction with HomeKit and App Maps to automatically adjust your home's thermostat settings based on your location. For instance, if you're returning home on a cold evening, your thermostat can preheat your living space for added comfort, making sure a welcoming environment upon arrival. Real-Time Translation for AirPods: AirPods Pro 2 and the upcoming AirPods 4th generation now support live language translation. This feature is particularly beneficial for travelers and professionals, allowing smooth, multilingual communication without the need for additional devices or apps. AirPods Pro 2 and the upcoming AirPods 4th generation now support live language translation. This feature is particularly beneficial for travelers and professionals, allowing smooth, multilingual communication without the need for additional devices or apps. Public Wi-Fi Login Sync: Devices linked to the same Apple ID will now automatically synchronize login credentials for public Wi-Fi networks. This eliminates the need to repeatedly enter login details across multiple devices, streamlining connectivity and saving time. These features not only enhance usability but also demonstrate Apple's focus on creating a more interconnected and intelligent ecosystem for its users. Visual Design Updates: Liquid Glass Refinements Apple continues to refine the visual design of its liquid glass interface, a hallmark of its user experience. After experimenting with changes in earlier beta versions, the company has decided to revert to the original design, which many users found more visually appealing and intuitive. This decision underscores Apple's commitment to delivering a polished and user-friendly interface that aligns with user preferences. The liquid glass refinements aim to provide a more cohesive and aesthetically pleasing experience, making sure that the interface remains both functional and visually engaging. These updates reflect Apple's dedication to balancing innovation with user feedback. Release Timeline and Broader Implications The developer beta 5 is scheduled for release on Monday, September 4, with public beta 2 following shortly after. These beta versions provide developers and early adopters with an opportunity to explore new features, test system performance, and offer valuable feedback before the official rollout. The iOS 26 beta represents a significant step forward in enhancing the Apple ecosystem. With improvements in system stability, battery life, and the introduction of practical features like adaptive temperature control and real-time translation, this update is designed to make your devices more efficient, intuitive, and interconnected. Whether you're a developer exploring new functionalities or an everyday user eager to experience the latest advancements, iOS 26 promises a more seamless and integrated experience that aligns with Apple's vision for the future. Dive deeper into iOS 26 Beta Features with other articles and guides we have written below. Source & Image Credit: iDeviceHelp Filed Under: Apple, Apple iPhone, Top News Latest Geeky Gadgets Deals Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
Reuters
an hour ago
- Reuters
German finance minister to push for steel quotas on Washington trip
BERLIN, Aug 4 (Reuters) - German Finance Minister Lars Klingbeil will advocate for a quota system on steel exports to be included in the EU's trade deal with the United States at a meeting with his U.S. counterpart, Scott Bessent, later on Monday, he told a radio broadcaster. "There is talk of a quota system for steel, and it would be good if there were one," Klingbeil told Deutschlandfunk radio on Monday before his planned meeting in Washington. There are a number of chapters that have not yet been finalised in the trade deal struck, said Klingbeil, and steel is a particularly important issue for the German economy and jobs. "I will test out what steps the American government is prepared to take and what the solution might look like," said Klingbeil, even though the EU is responsible for negotiations. The EU's trade deal with Trump in July was greeted with a mix of relief and anger, with tariffs set at 15% for most products but negotiations continuing for certain sectors, including steel and aluminium, which carry tariffs of 50%. German Chancellor Friedrich Merz had said on Friday the EU will negotiate with the United States on steel, with a focus on quotas that can be exported without too high tariffs. Klingbeil also urged quick clarification of other outstanding details in the trade dispute, including the investments promised by the EU and in the energy sector. "It should happen in the next few days," he said.
