Amazon Loses Ground in AI Race – Stock Plunges 7%

Amazon's stock fell by 7% on Friday as the tech giant's results reignited investor fears that its cloud unit is lagging behind Microsoft and Alphabet in the artificial intelligence race.

Amazon Web Services (AWS), which has long held a leading position in the cloud computing market, exceeded Wall Street estimates for June quarter revenue, posting a 17.5% increase. However, it significantly lagged behind the 39% growth seen in Microsoft Azure and the 32% earnings increase of Google Cloud.

Despite Amazon's capital expenditure of $31.4 billion, investors appeared disappointed. Google and Microsoft have also pledged to increase their spending and have been rewarded by investors for indications that Artificial Intelligence has already become a significant growth driver.

CEO Andy Jassy stated that it is still "very early" in the artificial intelligence race.

The stock drop is expected to erase approximately $170 billion from Amazon's market capitalization.

Source: OT