Amazon projects fourth quarter sales below estimates

Amazon.com projected fourth-quarter revenue largely below ​Wall Street estimates on Thursday, raising ​concerns over muted retail ‌demand ​over the crucial holiday season as higher household costs amid rising inflation pressure consumer spending. The company expects ‌revenue of $240.0 billion and $247.0 billion in the fourth quarter, compared with analysts' average estimate of $244.51 billion, according to data compiled by LSEG.

Revenue at Amazon Web ‌Services rose 39% to $46 billion in the third quarter ended September, compared ‌with analysts' estimate for a 38.2% increase to $45.61 billion, according to data compiled by LSEG. AWS revenue recorded a 37% jump in the second quarter. The downbeat fourth-quarter outlook signals ⁠US ​retailers could face pain ⁠in the holiday season, as consumers tighten shopping budgets amid higher gas prices and ⁠the rising cost of living.

Still, recent industry forecasts predict holiday sales will accelerate from ​last year. The National Retail Federation earlier this month predicted a 4.2% ⁠jump in total US holiday season sales. While retail sales account for the majority of ⁠Amazon's revenue, ​investor focus has shifted sharply towards its cloud computing business, Amazon Web Services in recent years, as the tech giant spends heavily ⁠to build out data centers and compete in the global AI race.

At its ⁠ecommerce business, Amazon ⁠has been rolling out faster delivery services globally and expanding to more rural areas in the US to draw ‌more ‌shoppers.