Amazon hinted on Thursday that growth is slowing at its profitable cloud division, Amazon Web Services (AWS).
The warning overshadowed Amazon's release of its quarterly report, which surpassed expectations.
Amazon reported quarterly revenue of $127.4B, surpassing the $124.5B expected by analysts surveyed by Refinitiv.
- AWS, one of Amazon's most successful divisions, posted revenue of $21.3B, which also beat expectations.
- Sales at AWS grew by about 16% year over year, a slowdown compared to the 20% growth posted the previous quarter.
- Amazon's Chief Financial Officer Brian Olsavsky said that "customers continue to evaluate ways to optimize their cloud spending in response to these tough economic conditions."
- Amazon shares dropped by 1.3% following Olsavsky's comments, giving up earlier gains of as much as 12% in extended trading.
Amazon has been working to cut 27,000 jobs since announcing layoffs in January.
- AWS chief Adam Selipsky began laying off employees at Amazon's cloud unit on Wednesday.
