On Thursday, Amazon reported its first-quarter earnings, and it initially sent shares surging (Yahoo Finance). However, cautious comments led to the stock forfeiting gains, with the CFO admitting that AWS growth rates are declining (MarketWatch). This overshadowed the fact that Amazon posted its biggest quarterly profit since 2021 (MarketWatch). As a result, Amazon stock dipped, despite reporting revenue that beat analysts’ estimates (CNBC).
Cloud computing growth slowdowns appear to be a concern for investors, with Amazon warning on “optimizations” from AWS customers (Yahoo Finance) and seeing slowing cloud growth (Investor’s Business Daily). Even Snap and Cloudflare have taken a hit (Investor’s Business Daily).
Despite these concerns, there are still reasons to buy Amazon stock. After a difficult 2022, Amazon’s stock is finally showing signs of life (The Motley Fool). Additionally, Amazon shares were trading higher in sympathy with Microsoft Corp and Alphabet Inc (Benzinga).
However, Amazon’s earnings beat estimates, yet the stock is still dropping, leading some investors to question if cost-cutting measures may have negatively impacted future growth (Barron’s). As always, investors must weigh the risks and rewards before making any decisions.
