Amazon reports strong earnings for 4th quarter but shares dip due to Outlook for first quarter

Amazon reported better than expected revenue and surplus for the holiday shopping period on Thursday, but its shares dipped in trade after closing time due to disappointing guidance for the current quarter.

The Seattle-based e-commerce and technology company said its revenue for the October-December period amounted to $ 187.8 billion, a 10% jump compared to the same period in 2023. The profits came out of $ 20 billion, while Earnings per Equity reached $ 1.86, higher than the $ 1.49 that analysts examined by the fact had expected.

But the company said it expected that the revenue for the current quarter would be between $ 151 billion and $ 155.5 billion, lower than the $ 158.56 billion expected by analysts. The guide expects “an unusually large, unfavorable influence” from exchange rates, it says.

Amazon is the largest online shopping destination in the United States and has long been a recipient of consumer costs during the holidays. As it has done in recent years, the company began to offer campaigns intended to lure early holiday buyers in October. It announced other discounts during the three -month period, including on larger sales days such as Black Friday and Cyber ​​Monday.

Amazon reported on Thursday that it saw $ 75.5 billion in revenue for its online shopping business, an increase of 7% from the same period in 2023.

Across the retail industry, Sales of holiday sales in November and December were better than expected Compared to the previous year as lower inflation on holiday goods, shoppers lured to buy, according to the National Retail Federation. Online shopping also saw record sales levels, reported Adobe Analytics in January.

Sales for Amazon Web Services, the company’s prominent cloud computing device, rose 19% over the fourth quarter. But it fell slightly under the expectations of analysts.

Amazon is one of the biggest players in the competitive tech race around generative artificial intelligence. Like other tech companies, it has increased investment in technology and uses billions to expand data centers that support AI and Cloud Computing. The company also uses money on other equipment, including its own computer chips and those developed by Nvidia. It has also rolled out its own AI models and integrated the generative AI into Other parts of its business.

In the fourth quarter, Amazon reported and spent $ 27.8 billion on property and equipment, significantly higher than the same period in 2023. During a call with analysts on Thursday, Amazon CEO Andy Jassy came that capital costs for quarter aimed at AI and Aws.

“We are thinking pretty much any application that we know of today will be reinvented with AI inside it,” Jassy said. “I think that both our business, our customers and shareholders will be happy medium-to-long expressions that we pursue the capital and business opportunity in AI.”

Jassy added during the call that Amazon, like many others, was “impressed” by Deepseek, the Chinese artificial intelligence company whose chatbot recently became the most downloaded app in the US

Amazon’s quarterly report comes as the retail industry absorbs A new customs of 10% President Donald Trump imposed the Chinese imports on Tuesday. Tariffs on Canada and Mexico are on wait for about a month.

Trump also threw a trade exemption that enabled low-value shipments from China to bypass tasks, a loophole that had benefited from China-founded e-commerce companies, such as Shein and Temu.

The new tariffs could benefit Amazon by increasing the cost of its competitors. But it would also affect Chinese sellers connecting with US consumers on the company’s shopping platform. In addition, it could raise the prices of a recently launched online store that Amazon set up to send low costs directly from China. The store, called Amazon Haulwas Amazon’s answer to Shein and Temu.

In addition, analysts from Morgan Stanley wrote in a Monday note that Amazon’s first-party retail business, although the company sells products purchased from manufacturers, has the highest exposure to tariffs. Analysts estimate 25% of the merchandise sold through this business comes from China.