Amazon Inc. AMZN shares were retreating on Wednesday, as they move in sympathy with Microsoft Corp. MSFT.
What Happened: Microsoft’s Cloud revenue rose 22% in the second quarter that ended Dec. 31, 2022, slowing from the 24% growth in the first quarter. On a constant currency basis, Cloud revenue growth slowed from 31% to 29%.
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Azure commercial cloud platform, which is more comparable with Amazon’s AWS platform, saw 38% revenue growth on a constant currency basis, down from 43% and 46% growth in the first quarter and the year-ago quarters, respectively.
Microsoft Cloud segment’s softness could stir fears concerning a worse-than-expected performance by Amazon’s cloud service. In the third quarter, AWS fetched a revenue of $20.54 billion for Amazon. This marked a 27% year-over-year growth, slowing from the 33.4% growth in the second quarter.
The bulk of Amazon’s operating income comes from the AWS division. So, any dent to AWS revenue could bode ill for profitability as well. The company is scheduled to report its December quarter results on Feb. 2.
Amazon, which was among the worst-performing large-cap stocks in 2022, has gained roughly 15% year-to-date.
Price Action: In premarket trading on Wednesday, Amazon shares slipped 2.41%, to $94, according to Benzinga Pro data.
Image and article originally from www.benzinga.com. Read the original article here.