Amazon earnings are hurt by investment in EV maker Rivian and slowing sales, although cloud-computing growth remains strong
Amazon reported a net loss of $2 billion for Q2 2022. The robust growth of the tech giant’s cloud-computing business was outweighed by continued weakness in core retail operations suffering from the slowdown after a pandemic boom.
Tech giant’s revenue in the latest period increased by 7.2% from a year earlier to $121.2 billion. That was a bit lower than the 7.3% rise in the first quarter. Thus, so far, 2022 shows Amazon’s slowest growth in about two decades.
Amazon’s loss totalled $2 billion in Q2, compared with a profit of $7.8 billion in 2021. One of the reasons for the decline is the company’s stake in electric-vehicle maker Rivian Automotive. Its valuation has plunged this year, causing Amazon to book a pretax loss of $3.9 billion in the second quarter.
Nevertheless, Amazon’s revenue grew faster than analysts anticipated due to its continued strength in cloud computing and the services provided to other vendors.
AMZN shares went up more than 13% in after-hours trading, hitting their highest point in about three months. At the same time, they are still down sharply from the start of 2022.
The company executives said that surging inflation is among its biggest challenges now. However, the tech giant has been able to make progress and deal with its shifting circumstances.
Like other high-growth companies, Amazon cut about 6% of employees during the second quarter. Besides, the company has put on hold its plans to expand operations through next year. The management now plans to shift capital expenditures to cloud computing and away from the company’s retail business.