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.com shares dropped nearly 8% before the bell on Friday, after growth in its cloud computing unit failed to impress investors, in contrast to the robust gains reported by AI-focused rivals Alphabet and Microsoft .

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.