Amazon faces scrutiny after cloud sales miss expectations

In the United States, Amazon experienced a setback in its cloud computing division, Amazon Web Services (AWS), which reported fourth-quarter revenue of $28.79 billion, falling short of Wall Street's forecast of $28.84 billion. This disappointed investors and led to a decline in Amazon's stock price, which dropped significantly in after-hours trading. The concerns over Amazon's performance were amplified as technology companies have been heavily investing in artificial intelligence (AI) infrastructure, raising questions about the viability and returns of such investments. Other tech firms like Microsoft and Alphabet also reported disappointing results, contributing to a broader skepticism about the future of AI investments. Despite these challenges, analysts on Wall Street remained largely optimistic about Amazon's prospects. They have adjusted their price targets for the company upwards, reflecting potential gains in the coming months, particularly due to what they perceive as Amazon's strong positioning in the AI arena through AWS. Notable firms like Goldman Sachs and Bank of America are optimistic about Amazon's retail business expansion and margin improvements, highlighting the importance of AI in its growth strategies. As investors digest these mixed messages from the company, the overarching sentiment suggests a cautious but forward-looking confidence in Amazon's future as it continues to invest in AI capabilities and infrastructure. The situation exemplifies the precarious balance between current performance and long-term growth potential that many tech companies are navigating amidst rapid industry changes.