Amazon Shares Plummet But Cloud Computing Keeps Dominating
Many investors will focus on Amazon.com's (NASDAQ: AMZN) slow growth and weak revenue forecast for the second quarter as they assess the company's first-quarter earnings report, released after market close on Thursday. After all, 7% growth represented the company's worst top-line growth since 2001 -- and management's guidance for Q2 revenue to grow at a rate of just 3% to 7% isn't encouraging either.
But there was one quote in the report that should help investors in Amazon (and investors in some other cloud computing stocks, for that matter) remain optimistic. While e-commerce may be facing some temporary headwinds, Amazon management seems confident that one trend's rapid growth trajectory remains unfazed: Cloud computing.
Sure, Amazon's overall results in Q1 were weak. But its paltry 7% net sales growth during the period was primarily due to poor performance in its e-commerce business; it wasn't a reflection of every Amazon business. Amazon's online stores segment saw revenue contract 3% year over year. Third-party seller services to support business partners selling goods on Amazon.com saw revenue grow just 7% year over year.
Source Fool.com
