AWS' revenue run rate hits $16bn

But Jeff Bezos' short stint as world's richest man is brought to abrupt end as Amazon misses quarterly targets, while analysts highlight fact that AWS' growth is slowing

Amazon shares have plummeted after the internet giant saw quarterly revenue grow, but profit fall 77 per cent.

For the three months ending 30 June Amazon saw year-on-year revenue increase by 24.8 per cent to just under $38bn (£29bn), while profit dropped from $857m to $197m - missing analyst estimates.

Amazon Web Services (AWS) however turned in a most positive performance, with revenue increasing 42 per cent to $4.1bn and operating income up 27.6 per cent to $916m.

Amazon share prices fell three per cent after its results were announced, bringing Jeff Bezos' (pictured) short stint as the world's richest man to an end.

On a conference call transcribed by Seeking Alpha, Amazon CFO Brian Olsavsky said that AWS partners and customers can expect to see further price decreases over the coming months.

"AWS stepped up its run rate from $14bn last quarter to $16bn," he said.

"Also we had the largest sequential and year-over-year dollar rise in revenues. Our usage in all our large services are actually accelerating and they're growing at a rate higher than our revenue growth. So you're seeing great adoption. We are seeing AWS customers migrate more than 30 databases over the last year and a half.

"We've had numerous price decreases, and we continue to have that in the AWS business; both absolute decreases in service costs and also rolling out new services that may be cannibalising more expensive other services that we provide."

Amazon recently announced that a new Hong Kong AWS region is set to launch next year, along with a second government cloud region in the US, adding to its existing 16 regions globally.

Despite seeing growth in AWS, TechMarketView analyst Kate Hanaghan pointed out that AWS' quarter-on-quarter revenue growth has been shrinking for some time.

"A key revenue growth driver [for Amazon] was AWS which saw sales climb 42 per cent," she said. "It's a fabulous number for which most tech companies would give their right arm.

"However, it is down - very slightly, admittedly - from 43 per cent in Q1 and continues the trend for slowing growth in the cloud business. Since Q1 2016, growth has slowed quarter by quarter from 64 per cent."