Amazon: Wall Street sanctions the worrying signals of the American giant

At Amazon headquarters, feelings are likely to be very mixed this Friday, October 28, 2022. And for good reason, the American juggernaut had its best quarter of the year between July and September, but that was not enough to reassure the steps. The latter have had very little taste of the group’s forecasts for the last quarter, which is usually the most prolific of the year with Black Friday and Christmas. After the announcement of its quarterly results, the action of Amazon thus unscrewed by 13% on Wall Street in the exchanges after the closing of the financial markets on October 27.

In the third quarter, Amazon reaped its first profits of the year, at 2.9 billion dollars, after two quarters of losses (5.8 billion in total), and recorded a turnover of 127.1 billion. dollars, up 14%. This increase is much stronger than in the first two quarters of the year (7%). The firm headed by Andy Jassy has particularly distinguished itself in the advertising market, with a 25% increase in its dedicated division, while other players such as Meta and Google are becoming disillusioned in this sector.

Amazon pessimistic for the end of the year

But behind this good performance, some indicators are worrying investors, like the slowing growth of the Seattle octopus in the cloud. Thus, the cash cow that is Amazon Web Services (AWS) saw its revenues increase by 27%, to 20.5 billion dollars, against 39% a year ago. Analysts were expecting revenue of $21 billion. However, this slower growth in the cloud is not a big surprise, given the rise of Google Cloud and Microsoft Azure.

More worryingly, Amazon’s operating expenses continue to rise, surging 18% to $125 billion in the third quarter. In addition to these costs, which are increasing faster than revenues, the American firm has shown itself to be relatively pessimistic for the end of the year, since it is counting on an increase in its activity of only 2 to 8% for a turnover including between 140 and 148 billion dollars, against 155 billion expected by analysts. As for the operating profit, it is expected between 0 and 4 billion dollars between October and December 2022, against 3.5 billion in the fourth quarter of 2021.

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