On Thursday, Amazon disappointed investors by reporting it forecast first quarter cloud revenue growth and operating profit below estimates.
The company's shares fell by 5% in after-hours trading before moderated.
The company's cloud unit Amazon Web Services saw its quarterly revenue rise of 16.9%, recording at $29.27 billion, with no forecasts of 17.4% growth and $30.9 billion sales.
In comparison, rival Microsoft reported on Wednesday that it exceeded the estimated value of its Azure Cloud unit. AWS revenue grew at its slowest pace in five quarters.
“AWS and Google Cloud have felt like they've been getting the most shares for quite some time, but that may be starting to change as Microsoft posted a lot.”
He said expectations for Amazon were high after Microsoft's strong performance.
The high tariffs Trump has imposed on goods imported from China have cast uncertainty on retailers such as Amazon. For example, some sellers say they will be sitting down at the company's much-motivated Prime Day sales event in July.
According to LSEG data, the Seattle company said its operating profit for the current quarter would range from $13 billion to $17.5 billion compared to an average estimate of $17.7 billion.
CEO Andy Jassy called in a call with analysts to ease anxiety about tariffs that are expected to raise retail prices in the coming months.
“We haven't seen a decline in demand yet,” Jussy said. “We have seen an increase in purchases in certain categories that could indicate that stocks are maintained prior to the impact of potential tariffs.”
He added, “I haven't seen the average selling prices for retail items yet rising considerably.”
The increase in revenue from third-party seller services in the first quarter increased to 7% in the first quarter, excluding the impact of foreign exchange.
Amazon's forecast for second-quarter sales exceeded estimates, but it was a encouraging indication for investors that e-commerce companies were navigating uncertainties related to tariffs.
According to data compiled by LSEG, Amazon reported total revenue of $155.7 billion in the first quarter ended March 31st at $155.7 billion.
According to data compiled by LSEG, the company forecasts net sales of $164 billion to $164 billion in the second quarter, compared to an analyst average estimate of $16009.1 billion.
Amazon posted a 19% jump in online advertising sales at $139.2 billion, surpassing analyst estimates. The company has become a major player in advertising sales, tracking only the meta and alphabet.
