By Deborah Mary Sophia and Greg Bensinger
(Reuters) – Amazon.com reported first-quarter growth in its cloud unit that missed analyst estimates on Thursday, sending shares lower, despite forecasting optimistic companywide sales in the current period.
Amazon forecast second-quarter sales largely above estimates, a reassuring sign to investors that the e-commerce company would navigate tariff-related uncertainty.
Shares of the company fell as much as 5% in after-hours trading before leveling off to a roughly 2% drop.
Amazon Web Services, the company’s cloud unit, is showing signs of weakness, with its 16.9% increase in first-quarter revenue to $29.27 billion missing expectations for 17.4% growth and $30.9 billion in sales.
Rival Microsoft, by comparison, reported on Wednesday it had exceeded estimates for its Azure cloud unit.
Amazon reported total revenue of $155.7 billion for the first quarter ended March 31, compared with analysts’ estimate of $155.04 billion, according to data compiled by LSEG.
The company expects net sales between $159 billion and $164 billion for the second quarter, compared with analysts’ average estimate of $160.91 billion, according to data compiled by LSEG.
High tariffs imposed by U.S. President Donald Trump on goods imported from China have cast uncertainty on retailers such as Amazon. Some sellers, for instance, have said they plan to sit out the company’s heavily promoted Prime Day sales event in July, Reuters reported.
(Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila and Rod Nickel)
