Amazon found itself caught in a broader tech industry slide on Thursday, seeing its shares plunge as much as 9 percent in after-hours trading following a disappointing third-quarter report. While the retail and cloud behemoth saw total revenue climb 12 percent to nearly 202 billion dollars, those figures still failed to meet the hopes of Wall Street analysts. The miss was particularly evident in earnings per share, which dipped to 1.89 dollars compared to 1.95 dollars a year ago, leaving investors uneasy about the company’s immediate financial trajectory.
Much of the friction stems from the staggering costs associated with the current artificial intelligence arms race. Amazon pointed toward massive investments in the AI startup Anthropic as a primary driver behind its earnings dip. This struggle is not unique to Amazon; it reflects a wider market rout where giants like Alphabet, Meta, and Nvidia are facing intense scrutiny over whether their hundred-billion dollar bets on generative AI will actually pay off. Even though CEO Andy Jassy insisted that investments in AWS are yielding strong results and projecting aggressive future growth, shareholders seem less convinced by long-term promises than by short-term losses.
Beyond the AI spending spree, several red flags emerged within Amazon’s core operations that dampened investor enthusiasm. For the first time in years, advertising revenue showed signs of cooling, declining relative to the previous quarter despite an overall yearly increase. Additionally, a calendar shift played havoc with the numbers because Prime Day moved into the second quarter this year. Company executives noted that without this timing change, revenue would have looked roughly 4 percent stronger, but such nuances did little to stop the bleeding as shares slipped below 230 dollars heading into executive calls.