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Investing.com-- Amazon (NASDAQ:AMZN) shares fell in aftermarket trade on Thursday following disappointing first quarter revenue from the company’s cloud unit, while its softer-than-expected guidance for the current quarter also pushed up concerns over trade tariffs.
Amazon shares were trading down 3.1% at $184.32 after falling as much as 5%.
Amazon Web Services (AWS)- the company’s cloud unit and the locus of its artificial intelligence ambitions- clocked a softer-than-expected March quarter revenue at $29.27 billion against expectations of $30.9 billion.
AWS revenue grew 16.9% in the quarter, its slowest pace of growth in five quarters. The print also largely contrasted with bumper cloud earnings from Microsoft’s Azure earlier this week, which had set a high bar for cloud earnings from Wall Street’s tech giants.
Disappointing earnings from AWS sparked some questions about Amazon’s AI prospects, especially amid heated competition in the U.S. and China over capturing a greater share of the fast-growing industry.
Still, Amazon’s overall earnings read stronger than expected, on strength in its advertising and e-commerce divisions.
But the company’s guidance for the second quarter underwhelmed, with operating income expected between $13 billion and $17.5 billion- less than estimates of about $17.7 billion.
Retail, which is still Amazon’s biggest revenue driver, faces new headwinds from a bitter U.S.-China trade war.
The company drew flak from the White House this week for considering telling consumers how much they were being charged over U.S. import tariffs. But the company denied that it had considered such a move.