[Trending News] Amazon stock falls after first quarter sales outlook disappoints

Amazon (AMZN) reported its fourth quarter results after the bell on Thursday, beating on the top and bottom lines, but providing worse-than-anticipated Q1 guidance.

Amazon stock fell more than 3% in early trading Friday after the news.

Amazon’s guidance for Q1 was well short of the midpoint of Wall Street’s outlook. The company says it sees Q1 revenue of between $151 billion and $155 billion. Analysts were anticipating $158 billion.

In a statement, the company said its Q1 revenue outlook, “anticipates an unusually large, unfavorable impact of approximately $2.1 billion, or 150 basis points, from foreign exchange rates.” Amazon added the leap year in 2024 added $1.5 billion to net sales.

AWS Q4 revenue came in at $28.7 billion, just shy of expectations of $28.8 billion.

During the company’s earnings call, Amazon CEO Andy Jassy said the company expects to spend roughly $105 billion in capital expenditures in 2025, the majority of which will go toward AI and data center spending. That’s a large jump from the $75 billion the company spent in 2024.

Amazon’s earnings come after cloud rivals Microsoft (MSFT) and Google (GOOG, GOOGL) missed on expectations for cloud sales in the quarter. Microsoft posted revenue of $40 billion, with Wall Street anticipating $41.1 billion, and Google reported sales of $11.9 billion. Analysts were looking for $12.1 billion.

Both companies blamed their cloud misfires on a lack of capacity to meet demand for AI services.

Amazon is the world’s largest cloud provider and, like Microsoft and Google, is furiously investing in building out its AI infrastructure capabilities to meet demand. In Q3, CEO Andy Jassy told shareholders the company planned on $75 billion in capital expenditures in 2024, and even more in 2025.

For Q4, Amazon posted earnings per share of $1.86 on revenue of 187.7 billion. Analysts were anticipating EPS of $1.50 on revenue of $187.3 billion. The company saw EPS of $1.00 and revenue of $169.9 billion in the same period last year.

Amazon is contending with the fallout from China-based AI startup DeepSeek’s new AI models, which sent Wall Street into a panic as investors questioned how an outfit with a modest budget and lacking state-of-the-art chips could churn out an AI platform to rival those of the most well-capitalized tech companies in the US.

Amazon, like Microsoft, has already made DeepSeek’s AI model available via its AI services platform, giving users the ability to access and use the AI software as they please.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @Hurn.

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