Slower Amazon stock ( NASDAQ:AMZN ) growth and a bleak prognosis alarmed investors. Amazon ( NASDAQ:AMZN ) has been striving to expand its e-commerce company for years, lavishly investing in its logistics network and delivery capabilities.
Even if such projects were unsuccessful, Amazon could always rely on its market-leading cloud computing company, Amazon Web Services (AWS).
Amazon Stock: Mostly Cloudy
As the adage goes, the devil is in the details, yet the specifics provided little comfort to investors. Amazon’s North American e-commerce revenue increased by 20%, while overseas sales decreased by 5%. When these two figures are added together, the company’s digital retail increased by almost 13% while incurring an operational loss.
Also, this was not just AWS’s slowest growth on record but it was also slower than its two main rivals. For the quarter ending September 30, Alphabet’s Google Cloud climbed 38% year on year, while Microsoft’s Azure gained 35%, although at a slower pace. While this isn’t an apples-to-apples comparison, it does demonstrate the heated rivalry among the main cloud providers, putting Amazon – the market leader – in the sights.
The forecast was perhaps the most worrying component of Amazon’s financial report. Amazon anticipates net sales in the $140 billion to $148 billion range for the current – and crucial – Christmas quarter, representing a 2% to 8% increase. The business also expects operational profits to range between $0 and $4 billion.
What Happens Next?
When things seem to be at their worst, it’s important to stand back and look at the larger picture since the long-term truth might be masked by the short-term turmoil.
It’s vital to remember that the economy is in a slump, with both consumers and companies cutting down on spending. Whether a recession occurs or not, investo...
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