Amazon Stock Drops 6.6% Despite Strong Earnings Report

SEATTLE, Wash. — Amazon (AMZN) reported its second quarter earnings on Thursday, July 31, 2025, revealing that shares fell more than 6.6% after the announcement. Despite beating expectations on both earnings and revenue, the decline was surprising to many investors.

The e-commerce giant reported earnings per share (EPS) of $1.68 and revenue of $167.7 billion. Analysts had predicted an EPS of $1.33 and revenue of $162.1 billion. However, the drop in stock price was largely attributed to underperformance in the Amazon Web Services (AWS) segment.

Amazon’s AWS revenue reached $30.8 billion, slightly above expectations of $30.7 billion. Nevertheless, this figure disappointed investors when compared to Microsoft‘s Azure, which reported $34.2 billion in revenue. The disparity raised concerns over AWS’s growth potential.

Furthermore, Amazon provided a conservative guidance for its third quarter, predicting operating income between $15.5 billion and $20.5 billion, notably lower than Wall Street’s anticipated $19.5 billion. These factors have led to increased scrutiny from investors.

On a brighter note, the consumer segment of Amazon performed better than expected, with online store sales climbing to $61.4 billion. CEO Andy Jassy stated that the company has not noticed any decline in consumer demand thus far.

Analysts believe the significant drop in Amazon’s stock can be linked to the lackluster performance of AWS and the cautious guidance provided. Additionally, the broader market conditions, including recent earnings results from tech giants like Microsoft, may have influenced investor sentiment and contributed to the sell-off.

In conclusion, while Amazon’s earnings report presented positive numbers overall, the stock market’s reaction reflects ongoing concerns over AWS performance and future guidance.