Episode summary
Amazon Falls as Profit Outlook, Cloud Growth Spook Investors | Bloomberg Intelligence
Bloomberg Intelligence
· · 21 min · Hosts: Paul Sweeney, Alexandra Semenova · Guests: Poonam Goyal, Angelo Zino, Vincent Piazza
Summary
Amazon sold off after management signaled weaker-than-expected operating income and slower cloud momentum, even though retail demand looked solid. The host framed the move as a reaction to AWS margins and to Amazon’s results being merely in line on sales while Microsoft and Google beat expectations. The guest said retail sales grew double digits, advertising rose more than 22%, and Amazon still has a long runway, but the cloud recovery will be “slow and steady” rather than immediate.
Apple’s quarter looked stronger, with revenue up 9.6%, the fastest growth in more than three years, and services up 13% year over year. The guest said the results were better than expected and that China returned to growth, but investors still lack clarity on tariffs and on Apple’s AI strategy. He argued that Apple needs to get its AI story right by the June 2026 developer conference at the latest, or risk missing a major upgrade-cycle catalyst.
Chevron and Exxon were both helped by strong upstream performance and record production, with the focus shifting to shale cash flow, Hess integration, and further M&A. The guest said Exxon’s Pioneer deal and Chevron’s Hess acquisition both fit a strategic push to consolidate high-quality Permian and Guyana assets.
Key takeaways
- Amazon’s retail business grew double digits, but weaker AWS margins and cautious guidance drove the stock down 7.2%, according to the guest.
- The guest said Amazon’s cloud growth remains intact but will build “year by year,” not from a sudden AI-driven jump.
- Apple posted 9.6% revenue growth and 13% services growth, but the guest said tariff changes and AI execution remain the key risks.
- The guest argued Apple must improve its AI story by the June 2026 developer conference at the latest to sustain the upgrade cycle.
- Chevron and Exxon both benefited from stronger upstream output, and the guest said more M&A could follow in the Permian and beyond.
Notable quotes
“The first on the retail side things were actually pretty well. Um sales grew double digits on the retail front”
“AWS business. And I think that's where you're seeing the selloff come from. They were disappointing plain and simple”
“It's going to come year by year. We're still very very optimistic that Amazon has a long runway for growth here”
“the results were really good, better than I think we anticipated in anybody else out there”
“the services number. They grew 13% year-over-year”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube.
I'm looking at Amazon. Stock's down 7.2% today. I don't know.
Anytime I see Amazon trade down like that, I'm like, boy, if I were a portfolio manager, you got to be thinking about this as a good time. It's flat year to date. So, certainly underperforming uh the marketplace here.
Uh they put out some numbers last night. A little bit disappointing on their guidance. Um and some questions about the cloud and kind of the growth rates there and all that kind of stuff.
Pun Goyle, she follows the company. She follows the stock. She's a senior US e-commerce and retail analyst for Bloomberg Intelligence.
Pum, what did you take away from the quarter last night?
Yeah, thanks Paul. So I think you know the quarter had two mixed reads. The first on the retail side things were actually pretty well.
Um sales grew double digits on the retail front and that was higher than we expected. Shows that value is driving shoppers to Amazon.com's retail platform and prices aren't going up. So shoppers are still buying at least on Amazon.com.
The second side of the story is Amazon's AWS business. And I think that's where you're seeing the selloff come from. They were disappointing plain and simple.
We saw Microsoft and Google, they both outperformed when they reported and Amazon was just in line on the sales side, but operating margins were much weaker, 32%. That's off of 39 plus% in the last quarter. The guidance was also weak on the margin side and I think that's really was what's causing the stocks to slide today morning.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amazon earnings
- cloud growth competition
- apple revenue growth
- oil and gas earnings
- crude price pressure
Companies and tickers mentioned
- AMZN
- AAPL
- XOM
- CVX
- Amazon.com Inc.
- Apple Inc.
- Exxon Mobil Corp.
- Chevron Corp.
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Intelligence
-
Anthropic’s IPO Is Said to Be About Six Times Oversubscribed | Bloomberg Intelligence -
Instant Reaction: Nvidia CEO Jensen Huang Ousted by Nvidia Board | Bloomberg Intelligence -
Nvidia’s Huang Ousted by Board in Move That Roils AI Economy | Bloomberg Intelligence -
CoreWeave Shares Soar After AI Computing Firm Eases Debt Fears | Bloomberg Intelligence -
Anthropic Targets $1.4 Trillion Valuation in Blockbuster IPO | Bloomberg Intelligence -
Nvidia Probe Into CEO Affair Raises Thorny Questions for AI | Bloomberg Intelligence
Bloomberg Intelligence, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
