What's going on?

Amazon reported first-quarter earnings that grew way beyond investors� expectation canopy on Thursday � but its next-quarter outlook was once again unwelcome to the jungle.

What does this mean?

Amazon�s total revenue was 17% higher than a year ago: buoyed by improving retail sales trends in the US, but still the lowest growth in four years. Revenue at the company�s highly profitable cloud computing arm grew 41%, however � helping it to shoot past overall profit predictions and post a record margin. But Amazon�s not wandering lonely: Microsoft, its rival for a $10 billion US Defense Department contract, also reported better-than-expected results on Wednesday thanks to a cloud segment that floats on high.


In an echo of its last three quarterly reports, Amazon�s forecast for this quarter was below what investors had hoped for. Still, if it repeats the profit trick, they probably won�t divorce its stock (tweet this).

Why should I care?

For markets: Amazon may be a whole #mood for investors.

Amazon�s stock price rose slightly in the wake of its bumper profit but uninspiring forecast. As the third-biggest public company in the US (two behind Microsoft, which became a $1 trillion company for the first time on Thursday) and one of the most closely watched, Amazon�s in a Prime position to pump up � or dampen down � the recent stock market party. Its rise may therefore encourage investors to buy up other stocks too.

The bigger picture: Cloud atlas, brick-and-mortar bat.

While Amazon�s cloud computing business generates most of the company�s profit, ecommerce remains a very public battleground. And Thursday�s disappointment for Walmart (the world�s biggest company by revenue) may boost Amazon further. Walmart�s planned sale of UK grocery chain Asda to local rival Sainsbury�s was blocked by British regulators concerned about a subsequent lack of competition. Walmart will now need a new plan (or a new buyer) to free up funds for the grocery war with Amazon: the Everything Store recently slashed prices at its Whole Foods chain again.