Bloomberg Businessweek Instant Reaction: Amazon Falls After Earnings, Cloud Growth Spooks Investors
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Jul 31, 2025 Amazon's latest earnings reveal a surprising drop in share prices, raising concerns about its AI investments. The competitive cloud market is fierce, with Microsoft and Google posing serious challenges to AWS. A new personal shopping assistant named Rufus aims to enhance the customer experience. The discussion also highlights significant consumer behavior trends and the implications of rising tariffs. As economic uncertainty looms, Amazon's strong position as a retail powerhouse is examined, along with its ongoing financial challenges.
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AWS Growth Lags Competitors
- AWS growth of 17% met expectations but lagged behind Microsoft's and Google's stronger performance.
- Amazon's lack of a ChatGPT-like AI application impacts its ability to capitalize immediately on the AI cloud boom.
AI Enhances Amazon Shopping
- Amazon uses AI to improve customer shopping experiences, especially via enhanced search and the AI assistant Rufus.
- This helps shoppers make better choices and improves conversion rates on Amazon's platform.
AI Boosts Conversion Rates
- Online shopping conversion rates are low but Amazon's AI investments help boost its conversion above industry averages.
- Incremental improvements in conversion due to AI translate directly into increased sales.