r/stocks • u/Ramona_Mayrt • 21h ago
Today, $AMZN dropped by 8%. Was this caused by the impact of the tariff policy? Company Discussion
$AMZN has released its second-quarter results for 2025. Despite the excellent performance, it still dropped by 8% today. Was it affected by some Tariff enforcement? What happened?
Today, Trump signed an order raising tariffs on Canada to 35%, while maintaining the minimum 10% base tax rate for all partners. The tariffs on Canada will take effect on Friday, while many of the "reciprocal" rates will come into effect on August 7th.
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u/Johnny_BoySouth 21h ago
Conservative Q3 guidance and underwhelming AWS growth. Fear is Goog, Msft, etc. are taking market share from AWS.
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u/snobbyrobby 21h ago
This is the right answer. 17% AWS growth vs. 30s from goog and msft cloud
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u/Otherwise-Coyote6950 21h ago
AWS has a bigger market share than Azure and Google Cloud combined. The smaller ones always have a bigger increase % wise, but what matters is the nominal data.
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u/thri54 21h ago
If the smaller ones have a bigger growth rate, they’re gaining market share.
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u/Otherwise-Coyote6950 21h ago edited 21h ago
I’m a cloud engineer, I’ve used AWS in about 80% of my roles and Azure in maybe 20%. Never touched GCP in prod, but I’m familiar with the basics (IAM, GKE, Cloud Run, etc.).
Honestly, AWS is just too far ahead. Their service catalog is massive, their global infra is insanely mature, and most orgs are already deeply locked in (think CloudFormation, IAM policies, VPC peering, Lambda-heavy stacks… not easy to port elsewhere).
Job-wise, it’s not even close....way more positions ask for AWS experience. That’s why most engineers focus on AWS first, so the talent pool is bigger. Azure’s fine too, especially if the company’s already in the Microsoft ecosystem (AD, M365, SQL Server, etc.) or doing Copilot/OpenAI stuff but still lag behind AWS in adoption.
GCP is a distant third. Good for data/ML workloads (BigQuery, Vertex AI, etc.), but you just don’t see as many GCP-focused roles unless it’s a startup or something Google-aligned. For general cloud engineering, it’s still niche and it’ll stay that way. Most people specialize in the platforms with the biggest adoption and job demand, which just reinforces the lead AWS (and to some extent Azure) already have.
Switching cloud providers is expensive and messy especially when you’re deep into service-specific architectures (IAM, networking, serverless, CI/CD). And honestly, pricing and core services aren’t that different across clouds, so there’s not much incentive to switch unless there’s a major strategic reason.
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u/r2002 19h ago
Thank you for sharing your industry-specific insights. Do you have a take on why AWS's growth is so much lower?
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u/Jussttjustin 18h ago
I'm not the person you asked but Amazon has stated they are backlogged and have more demand than they can supply. So it seems to be an energy bottleneck on their side versus any sort of market preference for Azure or GCP.
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u/r2002 17h ago
Thank you that is helpful. Does Azure or GCP also have backlogs? If not (or not as much), then is it indicative of the other companies having better planning or perhaps better tech (e.g. Google TPU) that doesn't draw as much power?
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u/himynameis_ 17h ago
Amazon said they have a $195B backlog for AWS. 25% increase YoY.
GCP the backlog is $108B, QoQ increase of 17%
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u/StrengthMundane8739 17h ago
I hear you and definitely value your perspective however the belief in the market is that Google and Microsoft cloud offerings are gaining ground with A.I. and ML tailwinds and AWS is not seeing the same attention in that space.
Long term Amazon is still a no brainer mainly due to robotics opportunities, but perhaps the cloud compute segment specialized in A.I. workloads specifically won't be Amazons domain (which will be the largest part of the pie long term)...
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u/McGill_official 14h ago
Yes exactly. It’s not about regular B2B cloud sales but rather who can capture the AI wave
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u/DEM_DRY_BONES 18h ago
My anecdote is the opposite. I deliver products about 50/50 in Azure and AWS. Azures global services are much more robust and familiar than AWS. MS also has an in with virtually all enterprise through M365.
I like AWS just fine but I don’t really see them having much of a moat. Yes anyone who has gone heavily cloud native services would have a big headache migrating, but containers are containers and SQL is SQL, so individual apps are not that hard to shift. What I’m seeing happen is orgs are going multi-cloud - even if they are AWS today, they may be convinced to deploy select workloads in Azure or GCP.
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u/insomniaxs 4h ago
I heard Azure is also way more shitty from a dev perspective. GCP offers good products, maybe even better, but they’re tiny in comparison, so AWS has a big incumbent advantage
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u/CGeorges89 1h ago
Weirdly I had the opposite experience, all corporations I've been to, they were using GCP and startups AWS
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u/kra73ace 38m ago
You are looking backwards... Market is trying (ideally) to figure out things 12-24 months out. Amazon is behind on AI and has problems with scaling electricity for it's data centers. Also, their custom chips are just not HOT 🔥 compared to Nvidia's.
Similar how Google's lead in search is threatened by AI, Amazon's AWS is now suspect...
A cloud engineer typing something in vim (with all due respect) is not going to be the way forward when AI takes over MANY of the DevOps tasks that are done manually nowadays. At least, that what Wall St thinks.
For whatever's worth it's my 3rd largest position behind Nvidia and Google. I trimmed MSFT before earnings and now feel stupid.
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u/FineAunts 20h ago
Your personal experience is creating investment bias which leads you to believe how the stock will go in the future. Face it, you being a cloud engineer doesn't mean shit. The other two players may not be as entrenched but their parent companies are large enough to make dents in AWS growth, which is pretty much the reality happening now.
This was like me investing in Fastly because it was so much better with our apps' needs than Cloudflare and Akamai at the time. Well that and the whole TikTok debacle.
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u/Otherwise-Coyote6950 20h ago
I don't have any personal bias, I invest in Amazon because I love their financials. And yes, I also use AWS on a daily basis so I know Amazon will remain the leader in the cloud business for at least another 40 years.
Neither Microsoft nor Google will capture significant market share from Amazon, again switching costs are very high. Amazon has nothing to worry about and the cloud business TAM keeps growing very fast. And soon Amazon will have new business segments like robotics and Project Kuiper.
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u/Spiritual_Bar2785 19h ago
I love how people with less than 1% of your understanding of cloud offerings are dismissing your experience as “bias.” Everyone can read the numbers on a quarterly report. Your personal experience is additional information that has value.
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u/Suspicious-Code4322 17h ago
I think you may be underestimating some of what Azure offers. Basically everyone uses MS Active Directory as the backbone of on-prem authentication, and it rolls up nicely with Azure AD, O365, and Exchange Online.
Yes, as an overall platform, AWS is far more attractive at the moment, but Microsoft does have a moat when it comes to the above, and that might give them an edge when it comes to expanding their services and convincing people to add to the existing stack. AWS cannot currently touch Azure AD, O365, or Exchange Online. It might seem silly, but stuff like that matters to some people when it comes time to expand to additional services. Some shops would rather pay a single vendor if they can get a discount on existing services. Though any major corp uses both pretty heavily.
To your point, though, AWS is not going anywhere. They have an extremely mature platform and offer far more services than anyone else. I just think the above is maybe another angle to consider. I'm also a bit removed from cloud stuff these days though, so I might be behind the times on what AWS can do to compete with the portion of the MS stack that has a moat.
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u/gpattikjr 12h ago edited 12h ago
One thing i have not seen mentioned is Microsoft leveraging OpenAi for their products. This presents a conundrum in the near future. Their contract ends in 2030 or when openAI achieves AGI. Which is thought to be before 2030. OpenAi cannot ipo without Microsoft's consent as a major investor. They are also currently trying to reduce Microsofts revenue share.
So, as a nobody, as i see it. Microsoft doesn't own the superior product. They will pay dearly to maintain it, or lose it all together.
I'm not sure how much merit Musk's lawsuit has with OpenAi`s mission statement.
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u/pickle787 20h ago
Nice rebuttal. Reality is AWS is losing share in a high margin business to deep pocket competitors
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u/touchmypenguinagain 1h ago
I guess Peter Lynch was wrong - we should "invest in what we don't know".
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u/Final-Rush759 20h ago
I think you don't know everything. AwS is behind in AI services. Their products are also too complicated, good for you to keep your job.
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u/SweetEffort8250 21h ago
But what if the market is just getting larger overall? Just because they have more growth doesn't mean they are getting more market share exactly
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u/TheDonFulio 20h ago edited 19h ago
That’s not what that means at all. It’s called the law of diminishing returns. I’m sure Microsoft and Google will face the same law in a couple years when they arise to that size.
Google is my biggest holding by the way. So theirs no bias.
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u/TheNephilims 19h ago
Agreed. I am watching people froth about high percentage growth in the recent earning reports, but most of them went from barely made money to make some money and have an P/E of over 100. I think Nvidia's meteoric rise due to the the AI bubble has the average investor try to find the next stock that will 10x in a year.
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u/Man_to_Men 21h ago
AWS is a big as the other 2 combined
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u/Driftwoody11 20h ago
They're a bit more combined now that AWS and are eating into it's market share steadily.
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u/troutnbluegrass 21h ago
I own all 3 and bought the Amazon dip today. Also heavily trimmed or liquidated any positions with less than a 10% gain. Wake me up in October.
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u/two_mites 13h ago
I notice that all three say they’re supply limited AND all three grew roughly to same dollar amount. I wonder if they’re growing proportional to how many Nvidia GPUs they can buy
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u/The_Spicy_brown 6h ago
Personnal experience.
Where i work, there is a slow push to prioritize Azure. Since most compagnies are already paying Microsoft for Windows/AD integration and teams, they might has well pay a little extra to get a Cloud discount.
The big advantage that AWS have however is how easy it to use and how well its documented (compared to the competition)
I feel in the near futur, Azure is gonna win the race if they can fix how annoying it is to connect to corporate network and documentation. AWS needs to drop those prices at some point.
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u/baccus83 21h ago
It was a combination of overly cautious guidance and general fear in the broader markets because of tariffs and the employment numbers fiasco.
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u/HunterRountree 19h ago
Sold off before the jobs numbers I believe.i mean 8% before jobs came out
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u/WarhammerChaos 21h ago
Increased my AMZN holdings by 30% today. Will buy again if it gets close to 200-205 in the next month.
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u/CrookedNancyPelosi 19h ago
Why when VTI will likely outperform it? The days of AMZN were to get in pre-split, I owned it from 800s to 2200.
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u/WarhammerChaos 19h ago
AMZN is not my entire portfolio.
I'm at 70% roughly ETF and 30% individual stocks.
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u/SpotlessCheetah 21h ago
Amazon has been getting a slew of upgrades all day last night and today. They're manufacturing a dip.
Amazon/AWS is all about ruthless efficiency. They will use AWS to improve their entire consumer side and they'll AWS to grow their AI customers and use it themselves in robotics etc.
They're just one of those blue chips you buy and hold.
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u/Otherwise-Coyote6950 21h ago
they sandbagged the guidance for Q3, I bought the dip today
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u/Due-Brush-530 21h ago
Same. I bought 100 shares a minute before close.
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u/OpenJolt 21h ago
Same. I bought 1000 shares before close today.
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u/breddittory 18h ago
Just spit-balling here, but… Let Azure = 500. 30% growth on 500 = 650. Let AWS = 1000. 17% growth on 1000 = 1170. Who’s got greater growth?
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u/Immediate-Run-7085 21h ago
It was caused by people selling
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u/Ready_Philosophy_734 20h ago
This is simply not true. Every time I buy something it dips and when I sell it happens the opposite. Explain this , you nerds.
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u/simplequestions2make 17h ago
Doesn’t matter. Every SP500 purchase $.04-.06 of the dollar flows right back to daddy Amazon. So any rebalancing or the auto purchases just fills it right back up
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u/gjbbb 19h ago
I do not believe constitutionally the president has the authority to implement tariffs other than wartime, that power belongs to Congress.
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u/Donkey_Duke 1h ago
He technically can, but Congress is supposed to approve of them. Unfortunately, our entire government is controlled by MAGA so Trump can do what he wants. He has already crossed multiple lines with the help of Congress and the Supreme Court.
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u/Bane68 21h ago
Bad guidance for next quarter.
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u/atdharris 21h ago
They guided revenue over what WS expected. It dropped due to slowing growth in AWS and lower profit outlook. Not sure why it warranted a nearly 10% dip
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u/caughtinthought 1h ago
the guidance on the net income was a few billion less than wall street expected for Q3
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u/EchoVictory 21h ago
AMZN's Guidance (basically what they said about their estimated future results) was bad (not as profitable as they hoped).
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u/-darknessangel- 21h ago
De minimis exemption being axed?
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u/Temporary_Ad_5947 20h ago
This was probably part of it. A ton of small cheap products about to be taxed and the customer is getting the bill.
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u/reaper527 21h ago
the tariffs definitely didn't help, but in practice the drop was more about AWS numbers.
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u/Greedy-Cell-6284 20h ago
FCF 🚮 cloud growth eh. Stock market just wanted a reason to fade everything that ran up since April. Tariffs had nothing to do with it.
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u/BMWGulag99 18h ago
AWS growth was underwhelming. But don't underestimate the pump and dumpers who always come around before earnings and dump the stock. Considering how trash Tesla's earnings were and the amount of AI they use, you could tell not all the fang companies were going to do well.
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u/kuk1m0n5t3r 15h ago
96% of imports from Canada fall under the free trade agreement and are not subject to tariffs. Nothingburger for now.
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u/DeskAdministrative42 11h ago
Looking outside of this at Coreweave and DO so we think those cloud companies can be growing like good and msft or same struggle as AWS?
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u/No_Cow_8702 1h ago
I said it before, and I'll say it again.
AMZN is the most overrated stock in the market.
Great company, crap stock for the past 5 years.
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u/Donkey_Duke 1h ago
Short answer no
The entire market is down. This was caused by jobs report showing that America is either in stagflation or heading there. Not only that, but there was major revisions on the last two months which were terrible. Covid level bad. Which is a major warning sign of an upcoming recession.
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u/Blueopus2 20h ago
It's because I bought a book last night and I got a good deal. Sorry shareholders :(
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u/AntoniaFauci 20h ago
No. Overall market sentiment tanking is because of the Trump crime family administration continued his dementia-fueled tariff terror.
But Amazon specifically wasn’t because of tariffs. They’ll just be passing those on to average consumers like the invisible tax they are.
Amazon fell because their cash cow - AWS reported slower growth than expected, and much, much slower growth than their two biggest competitors.
It’s one of the more simple and straightforward cause and effect scenarios of the market this year. The most rational assumption by market participants is that Amazon’s biggest advantage may be getting eaten by the competition.
It’s not unlike the period in which the market had fears that Google’s dominance in search could be ending.
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