Amazon Misses Earnings Expectations Amid AI Spending Spree

As of August 1st, 2025, Amazon has reported its latest quarterly results, which paint a mixed picture for the tech giant. While the company's revenue numbers exceeded Wall Street's projections, there are concerns that its operating income may fall short of expectations.

Amazon's second-quarter earnings report showed revenue up 13.3% year-over-year to $167.7 billion, beating the market's estimate of around $162 billion. The company's Amazon Web Services (AWS) cloud computing division also reported strong growth, with sales reaching $30.9 billion, an increase of 17.5% compared to the same period last year.

However, the company cautioned that its operating income could range between $15.5 billion and $20.5 billion, compared to the expected $19.4 billion. This news caused Amazon's share price to drop over 3% in after-hours trading, as investors expressed concerns about the company's immediate future.

Amazon's earnings report comes as the tech giant is engaged in a fierce race with other major tech companies, including Google, Meta, and Microsoft, to dominate the artificial intelligence (AI) market. The company has announced plans to spend $100 billion by 2025, with the "vast majority" of that investment going towards enhancing its AI capabilities.

CEO Andy Jassy touted Amazon's AI progress, claiming that the company has deeply integrated AI services into many of its products and operations, improving customer experiences, innovation speed, operational efficiency, and business growth.

The e-commerce giant has also been grappling with the ongoing impact of former President Trump's sweeping tariffs, which have affected its reliance on international sellers. The administration had previously criticized Amazon following a report that the company planned to itemize tariff-related price increases on its platform, though no such itemization has appeared on Amazon's marketplace.