Amazon.com Inc. dropped in late trading after projecting weaker-than-expected operating income and trailing the sales growth of its cloud rivals, leaving investors searching for signs that the company’s huge investments in artificial intelligence are paying off.

Amazon shares fell 7% on Friday in Europe after the company delivered an upbeat outlook for third-quarter sales, but missed expectations for its cloud computing unit, after its competitors easily beat Wall Street forecasts.

Amazon's stock sank on Thursday afternoon, weighed down by mixed guidance and AI competition, though the company beat Q2 earnings expectations.

With headcount inching up to 1.55 million, CEO Andy Jassy said "AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth,

Amazon.com reported solid second-quarter earnings that beat expectations Thursday afternoon.Earnings rose to $1.68 a share versus Wall Street’s consensus estimate of $1.33, according to FactSet, and were up from $1.

From the question of where Amazon is in the AI race to forecasts for the next quarter, here are four key takeaways from the Q2 earnings call.

The Deutsche analysts said it's "become abundantly clear" that Amazon has gained a greater share of the U.S. e-commerce market in the face of diminished competition from ultra-cheap Chinese online retailers Shein and Temu, which is owned by PDD Holdings.