Amazon shares faced a notable decline of approximately 4% on Thursday evening, following the company's announcement of its stronger-than-expected fourth quarter results. The e-commerce and cloud giant disclosed these results after the closing bell, leaving market participants to react during extended trading hours. Despite the positive performance in the fourth quarter, concerns were raised regarding Amazon's first-quarter 2025 forecast and its capital expenditure plan, which both weighed heavily on investors' sentiments.
Investors expressed disappointment over Amazon's first-quarter 2025 forecast, which fell short of market estimates. This forecast became a focal point for market participants, overshadowing the encouraging results from the previous quarter. The forecast missed market expectations, causing apprehension about the company's near-term performance and growth potential.
Additionally, Amazon's capital expenditure plan attracted scrutiny, as it revealed a larger-than-anticipated financial outlay. The plan sparked concerns about the company's spending strategy, which some market participants viewed as excessive. This unexpected increase in planned expenditures added to the unease among investors, contributing to the decline in Amazon shares during the extended trading session.
Extended trading refers to transactions that occur after regular market hours have concluded, allowing investors to respond to company announcements made post-market close. It was during this period that Amazon's share price experienced a downturn, reflecting negative sentiment towards the company's future projections and spending plans.
Despite the setback in share value, Amazon's fourth quarter performance showcased impressive results that exceeded analysts' expectations. The company's robust performance highlighted its continued strength in the e-commerce and cloud sectors. However, the immediate focus of market participants shifted to the company's forthcoming challenges and strategic decisions.