Andy Jassy, CEO of Amazon and then CEO of web services at Amazon.com Inc., speaks during the Amazon Web Services (AWS) Summit in San Francisco, California, U.S., on Wednesday, April 19, 2017.
David Paul Morris | Bloomberg | Getty Images
Amazon on Thursday posted weaker-than-expected earnings and revenue for the third quarter and gave a disappointing fourth-quarter sales forecast.
The stock plummeted as much as 19% in extended trading, which would mark its biggest decline since 2006 should the drop hold up on Friday.
Earnings: 28 cents per share
Revenue: $127.10 billion vs. $127.46 billion, according to Refinitiv estimates
Here’s how the other key Amazon segments did during the quarter:
Amazon Web Services: $20.5 billion vs. $21.1 billion expected, according to StreetAccount
Advertising: $9.55 billion vs. $9.48 billion expected, according to StreetAccount
Amazon said it expects to post fourth-quarter revenue between $140 billion and $148 billion, representing year-over-year growth of 2% to 8%. Analysts were expecting sales to come in at $155.15 billion, according to Refinitiv.
Revenue grew 15% in the third quarter, marking a return to double-digit sales expansion, but it still fell short of Wall Street’s projections.
Like the rest of Big Tech, Amazon has had a rocky year so far as it confronts macroeconomic headwinds, soaring inflation and rising interest rates. Those challenges have coincided with a slowdown in Amazon’s core retail business, as consumers returned to shopping in stores.
It’s the second time this year Amazon’s results have been disappointing enough to spark a double-digit percentage selloff. In April, a weak forecast for the second quarter led to a 14% drop in the stock.
“There is obviously a lot happening in the macroeconomic environment,” Jassy said in the press release. “And we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.”
Amazon’s gloomy fourth-quarter sales forecast doesn’t bode well for the holiday shopping period. Analysts are already girding for a humdrum season, with online sales expected to grow just 2.5%, according to Adobe.
Amazon’s Prime Early Access Sale, held earlier this month, could help juice year-end sales. Data collected by third-party analysts signaled the event may have been lackluster, as shoppers feel the pressure of inflation. Jassy said in the release that customer response to the new discount event, and Prime Day, hosted in July, was “quite positive.”
Amazon is rounding out a disappointing earnings week for Big Tech. Alphabet and Facebook parent Meta both posted earnings that fell short of expectations as they navigate challenges in the digital ad market. Microsoft wasn’t immune, reporting softer-than-expected cloud revenue and weak quarterly guidance.
Apple, which also reported on Thursday, beat on earnings and revenue but came up short in core product categories including the iPhone business and the services unit. The stock is trading lower after hours.
Operating income at Amazon fell by almost half from a year earlier to $2.53 billion from $4.85 billion. AWS accounted for all of the company’s profit, plus some, as the cloud unit generated operating income of $5.4 billion. Still, AWS missed analyst estimates for revenue.
Amazon’s advertising business was one bright spot in the results, bucking the trend of its digital ad peers Meta, Alphabet and Snap, whose ads businesses have gotten whacked due to the economic environment and Apple’s iOS privacy changes last year. Ad revenue surged 25% year over year to $9.55 billion during the quarter, which handily topped analysts’ estimates of $9.48 billion.
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People stand in front of an Apple store in Beijing, China, on April 9, 2025.
Tingshu Wang | Reuters
Apple iPhone sales in China rose in the second quarter of the year for the first time in two years, Counterpoint Research said, as the tech giant looks to turnaround its business in one of its most critical markets.
Sales of iPhones in China jumped 8% year-on-year in the three months to the end of June, according to Counterpoint Research. It’s the first time Apple has recorded growth in China since the second quarter of 2023.
Apple’s performance was boosted by promotions in May as Chinese e-commerce firms discounted Apple’s iPhone 16 models, its latest devices, Counterpoint said. The tech giant also increased trade-in prices for some iPhone.
“Apple’s adjustment of iPhone prices in May was well timed and well received, coming a week ahead of the 618 shopping festival,” Ethan Qi, associate director at Counterpoint said in a press release. The 618 shopping festival happens in China every June and e-commerce retailers offer heavy discounts.
Apple’s return to growth in China will be welcomed by investors who have seen the company’s stock fall around 15% this year as it faces a number of headwinds.
Since then, Huawei has aggressively launched devices in China and has even begun dipping its toe back into international markets. The Chinese tech giant has found success eating away at some of Apple’s market share in China.
Huawei’s sales rose 12% year-on-year in the second-quarter, according to Counterpoint. The firm was the biggest player in China by market share in the second quarter, followed by Vivo and then Apple in third place.
“Huawei is still riding high on core user loyalty as they replace their old phones for new Huawei releases,” Counterpoint Senior Analyst Ivan Lam said.
Chinese tech giant Baidu has bolstered its core search platform with artificial intelligence in the biggest overhaul of the product in 10 years.
Analysts told CNBC the move was a bid to keep ahead of fast-moving rivals like DeepSeek, rather than traditional search players.
“There has been some small pressure on the search business but the focus on AI and Ernie Bot is a key move ahead,” Dan Ives, global head of tech research at Wedbush Securities, told CNBC by email. Ernie Bot is Baidu’s AI chatbot.
“Baidu is not waiting around to watch the paint dry, full steam ahead on AI,” he added.
Baidu AI overhaul
Baidu is China’s biggest search engine, but — as is also being seen by Google — the search market is being disrupted.
Users are flocking instead to AI services such as ChatGPT or DeepSeek, which shocked the world this year with its advanced model it claimed was created at a fraction of the cost of rivals.
But Kai Wang, Asia equity market strategist at Morningstar, also noted that short video platforms such as Douyin and Kuaishou are also getting into AI search and piling pressure on Baidu.
To counter this, Baidu made some major changes to its core search product:
Users can now enter more than a thousand characters in the search box, versus 28 previously;
Questions can be asked in a more direct and conversational manner, mirroring how people now use chatbots;
Users can ask questions through voice but also prompt the seach engine with pictures and files;
Baidu has integrated its AI chatbot features, which enable users to generate photos, text and videos, into the product.
“This is more aligned with how people use ChatGPT and DeepSeek in terms of how they look for answers,” Wang said.
Outside of China, Google has also been looking to enhance its core search product with AI, highlighting how search has been under pressure from the burgeoning technology.
Baidu on the offense
Baidu was one of China’s first movers when it came to AI, releasing its first models and ChatGPT-style product Ernie Bot to the public in 2023. Since then, it has aggressively launched updated AI models.
However, the Beijing-headquartered company has also faced intense competition from fellow tech giants like Alibaba and Tencent, as well as upstarts such as DeepSeek.
These companies have also been launching new models and infusing AI into their products and Baidu’s stock has fallen behind as a result. Baidu shares have risen around 2.5% this year, versus a 30.5% surge for Alibaba and a 20% rise for Tencent.
“This is a defensive and offensive move … Baidu needs to be aggressive and perception-wise show they are not the little brother to Tencent on the AI front,” Wedbush Securities’ Ives added.
