After Google, Amazon caught between the rise of AI and disappointment in its traditional businesses

Amazon reported disappointing quarterly results, leading to a more than 5% drop in its stock price. The company faces slow growth in online retail and anticipates a lackluster holiday season. Despite a 12% year-over-year increase in net sales to $202 billion, results fell short of expectations. Amazon is heavily investing in AI services, resulting in a record negative free cash flow of $42 billion over the year. However, its cloud computing division, Amazon Web Services, saw a 39% increase in sales, the highest in five years. This reflects a broader trend where AI impacts traditional tech sectors, raising concerns among investors about future profitability.