Shares of the company fell as much as 5% in after-hours trading before paring losses to about 1%.
Amazon Web Services, the company's cloud unit, recorded a 16.9% increase in quarterly revenue, to $29.27 billion, missing expectations of 17.4% growth and $30.9 billion in sales.
Rival Microsoft (MSFT.O), by comparison, reported on Wednesday it had exceeded estimates for its Azure cloud unit. AWS revenue grew at its slowest pace in five quarters.
"It's always felt like AWS and Google Cloud were taking the most share for quite some time, but maybe that's starting to turn because Microsoft posted great numbers," said Dave Wagner, portfolio manager at Aptus Capital Advisors. He said expectations for Amazon were higher after Microsoft's strong performance.
After Microsoft's results, investors raised expectations for AWS and it failed to meet them, said Gil Luria, analyst at D.A. Davidson.
High tariffs imposed by U.S. President Donald Trump on goods imported from China have cast uncertainty on retailers such as Amazon. Some sellers, for instance, have said they plan to sit out the company's heavily-promoted Prime Day sales event in July, Reuters reported.
The Seattle company said operating income for the current quarter would be between $13 billion and $17.5 billion, compared with the average estimate of $17.7 billion, according to LSEG data.
On a call with analysts, CEO Andy Jassy sought to ease jitters about the tariffs, which are expected to boost retail prices in the coming months.
"We haven't seen any attenuation of demand yet," Jassy said. "We've seen some heightened buying in certain categories that may indicate stocking up in advance of any potential tariff impact."
He added: "We also have not seen the average selling price of retail items appreciably go up yet," noting that sales of lower-cost essentials were rising steadily.
Growth in revenue from third-party seller services more than halved to 7% in the first quarter, excluding the impact of foreign exchange.
Amazon's forecast for second-quarter sales was above estimates, however, a reassuring sign to investors that the e-commerce company would navigate uncertainty related to tariffs.
Jassy said the company is "maniacally focused" on keeping retail prices low, without providing many specifics. He said Amazon had encouraged sellers to move more inventory to the U.S. before higher tariffs take effect.
Amazon reported total revenue of $155.7 billion for the first quarter ended March 31, compared with analysts' estimate of $155.04 billion, according to data compiled by LSEG.
The company expects net sales between $159 billion and $164 billion for the second quarter, compared with analysts' average estimate of $160.91 billion, according to data compiled by LSEG.
Amazon posted a 19% jump in online ad sales to $13.92 billion, surpassing analyst estimates. The company has become a major player in ad sales, trailing only Meta and Alphabet.
