StoneFlare

```plaintext

```

Title: Amazon Q3 FY2024: AWS Growth Concerns Weigh on Stock

Amazon's Q3 FY2024 earnings report led to a 6% drop in its stock price on August 2, 2025. Despite exceeding overall revenue expectations with $158.9 billion versus the $157.2 billion forecast, AWS revenue growth of 12% to $26.3 billion fell short of analyst expectations of $27.5 billion. Operating income was strong at $17.4 billion, surpassing estimates, but concerns over slowing AWS growth and intensifying competition overshadowed these positives. Additionally, the announcement of increased capital expenditures for AI infrastructure added pressure to the stock. [Sources: Amazon IR Press Release, Transcript, Reuters]

What drove the move:

AWS revenue growth was 12% year-over-year, reaching $26.3 billion, missing the consensus estimate of $27.5 billion. This slowdown in growth raised concerns among investors about AWS's competitive position. [Source: Amazon IR Press Release]
Amazon's overall revenue of $158.9 billion exceeded forecasts of $157.2 billion, but the focus remained on the cloud segment's performance. [Source: Amazon IR Press Release]
Operating income came in at $17.4 billion, beating expectations, but was overshadowed by AWS's performance. [Source: Amazon IR Press Release]
Increased capital expenditures for AI infrastructure were announced, which could impact short-term free cash flow and profitability. [Source: Transcript]
Competitive pressures from Microsoft Azure and Google Cloud were noted as factors contributing to AWS's growth deceleration. [Source: Reuters]

Key quotes:

"Margins": "Operating income exceeded expectations, but AWS's slower growth is our main focus." [Source: Transcript]
"Guidance": "We are investing significantly in AI infrastructure, which will increase capital expenditures in the near term." [Source: Transcript]
"Competition": "AWS faces increasing competition from Microsoft Azure and Google Cloud, impacting growth rates." [Source: Reuters]

Context & comps:

AWS's 12% growth contrasts with Microsoft's Azure, which recently reported a 14% growth rate, indicating competitive pressure. [Source: Bloomberg]
Google Cloud has been gaining market share, further intensifying competition in the cloud services sector. [Source: WSJ]
The broader tech sector has seen increased capital spending on AI, aligning with Amazon's recent capex announcement. [Source: Reuters]

What to watch next:

AWS's growth trajectory and competitive positioning, especially against Microsoft Azure and Google Cloud.
Impact of increased AI infrastructure spending on Amazon's profitability and free cash flow.
Any signs of margin stabilization or improvement in the upcoming quarters.

Sources: Amazon IR Press Release, Transcript, Reuters, Bloomberg, WSJ.

```