Amazon shares plunged as much as 12% on Friday, a day after the company reported mixed second-quarter results and gave a forecast for the third quarter that fell short of Wall Street’s expectations.

Revenue in the second quarter rose 10% from a year earlier to $147.98 billion, falling just short of $148.56 billion projected by LSEG. Net income at Amazon doubled from a year earlier to $1.26 a share, topping analysts estimates of $1.03 per share and providing the latest evidence that the company’s focus on cost-cutting is bolstering its bottom line.

For the third quarter, which runs through September, Amazon said it expects revenue of $154 billion to $158.5 billion. The midpoint of the range, $156.25 billion, fell short of consensus estimates of $158.24 billion, according to LSEG.

The company said it saw softer-than-anticipated sales because consumers continue to “trade down” to lower ticket items, such as everyday essentials and consumables, or items that tend to be cheaper and used up on a regular basis. What’s more, a chaotic news cycle means that consumers are more distracted than usual, and may wait to make a purchase or abandon their cart altogether, Amazon CFO Brian Olsavsky said on a call with reporters.

Olsavsky pointed to the Olympics, the ramp up to the presidential election, and the recent assassination attempt of former President Donald Trump as recent events that have distracted consumers and made it a “tough quarter to forecast.”

Analysts at JP Morgan said Friday they were less worried about the retail miss and more encouraged by continued strength in Amazon’s cloud computing segment. Amazon Web Services revenue reached $26.3 billion during the quarter, topping consensus estimates of $26 billion.

“Sometimes Retail leads AMZN’s business and other times it’s AWS,” the JP Morgan analysts wrote in a note to clients. They have an overweight rating on the stock.

BMO Capital Markets analysts agreed, saying they were pleased that AWS growth accelerated for the third straight quarter, demonstrating that the cost optimization seen in recent quarters is now in the rearview mirror.

“We believe AWS is well-positioned to benefit from a shift back to modernization, with additional benefits as new workloads are born in the cloud,” said the analysts, who have an outperform rating on Amazon shares. “Despite the view that Amazon is far behind in AI, we see Amazon as a key AI beneficiary, having already achieved a multi-billion dollar run-rate business in AI.”

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