Amazon shares (NASDAQ:) fell nearly 9 percent after it reported weaker than expected Q1 2022 earnings and disappointing revenue outlook.

According to Refinitiv, Amazon’s adjusted earnings per share (EPS) was $7.56 in the first quarter. This is lower than the $8.36 consensus estimate. The revenue came in at $116.44 million, which is lower than the analyst estimate of $116.3billion. Amazon’s revenue grew 7% in the first quarter, compared to 44% growth in the year-ago period.

Amazon Web Services (AWS), which generated $18.44 Billion during that period, exceeded the consensus projections of $18.27 Billion. Analysts expected advertising to generate $8.17 billion, but $7.88 million in revenue.

The e-commerce giant sustained a $7.6 billion loss on its Rivian bet after the carmaker’s shares lost more than 50% of their value in the quarter.

The company’s Q2 outlook suggests that growth could slow down even further, in the range of 3% to 7% from a year ago. Amazon anticipates that its Q2 revenue will fall to between $116 billion-$121 billion, which is below analyst expectations of $125.5 million.

“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” said Amazon CEO Andy Jassy.

Jassy added that Amazon made “encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”

Morgan Stanley Analyst Brian Nowak reiterated his Overweight Rating, but reduced the price target to $4,200 from $3,800 in order to reflect lower EBITDA estimates for 2023 by approximately 14%.

“We remain bullish while acknowledging that the catalyst may have just gotten pushed back to October earnings when AMZN (we hope) will guide to another quarter of revenue acceleration and profitable retail quarter (4Q:21)…the first one of the year,” Nowak wrote in a note.

Aaron Kesler, a Raymond James analyst, remains bullish about Amazon stock because of several factors.

“1) we continued to expect solid long-term eCommerce growth; 2) Continued leadership and momentum in cloud; 3) robust advertising growth; and 4) expect an improving long-term margin profile driven by strength of high margin areas including AWS and advertising and productivity improvements for retail.”

Kessler also decreased the price target to $2,300, from $3,000.

By Senad Karaahmetovic