Amazon's gloomy earnings forecast overshadows better-than-expected results

In this articleAMZN your favorite stocksCREATE FREE ACCOUNTwatch now2:2802:28Amazon s sink despite beat on revenue and earningsClosing Bell: OvertimeAmazon s slid more than 7% in ext trading on Thursday after the company reported second-quarter results that exceeded expectations, but it gave light operating income guidance for the current period.The stock moved lower during a conference call with investors, as CEO Andy Jassy was asked growing cloud competition and artificial intelligence spending.Jassy tried to reassure investors on the call that AWS has maintained a "pretty significant" leadership position relative to its cloud rivals and he feels optimistic its AI offerings.Here's how the company did, compared with estimates from analysts polled by LSEG:Earnings per : $1.68 vs. $1.33 expectedRevenue: $167.7 billion vs. $162.09 billion expectedWall Street is also looking at other key revenue numbers:Amazon Web Services: $30.87 billion vs. $30.8 billion expected, according to StreetAccountAdvertising: $15.7 billion vs. $14.9 billion expected, according to StreetAccountAmazon's second-quarter sales grew 13% year over year to $167.7 billion, an acceleration from a year ago, when revenue expanded 10%.For the current quarter, Amazon said it expects operating income to land between $15.5 billion and $20.5 billion

Analysts were looking for $19.48 billion, according to StreetAccount.The guidance spooked investors who are eager to see Amazon's hefty investments in AI pay off

The company has committed to spend up to $100 billion this year on AI as it races to build out data centers and software."Our AI gress across the board continues to imve our customer experiences, speed of innovation, operational efficiency, and growth, and I'm excited for what lies ahead," Jassy said in the earnings release.Read more CNBC newsTesla Autopilot plaintiffs seek $345 million in damages over fatal crash in FloridaFacing questions on AI strategy, Tim Cook says Apple is 'very open' to acquisitionsFigma's top VCs are sitting on $24 billion worth of stock after massive IPO popAmazon's gloomy earnings forecast overshadows better-than-expected resultsRevenue in the third quarter is forecast to be $174 billion to $179.5 billion, representing growth of 10% to 13% year over year

Ad revenue grew 23% year over year to $15.69 billion in the second quarter, beating StreetAccount estimates of $14.99 billion.The online retail giant's online advertising unit is dwarfed by Amazon's retail and cloud units, but it's become a growing fit center and is also the third-biggest digital ad platform, trailing Meta and Alphabet.Meta said Wednesday that its second-quarter sales, the bulk of which are derived from online advertising, grew 22% year over year

Google's advertising sales rose 10% year over year in the second quarter, its parent company Alphabet said last week.For the second quarter in a row, Amazon included "recessionary fears," along with "tariff and trade policies," as factors that could affect its guidance

President Donald Trump's shifting trade policies stand to affect its core retail the most, though consumer spending has ven to be more resilient than analysts feared.Jassy said on a call with investors that the tariffs haven't dented demand or driven up prices so far this year."If costs end up being higher, we will absorb them," Jassy added.Sales in Amazon's online stores unit grew 11% year over year to $61.5 billion during the quarter, topping Wall Street's jected $59 billion, according to StreetAccount.Seller services revenue reached $40.3 billion, which was a 11% year over year increase