Jeff Bezos enjoyed the title of world’s richest man for several hours, before he had to relinquish it back to Bill Gates after AMZN stock dumped after hours when the company reported Q2 net income of $197 million, or $0.40 per diluted share, down from $857 million, or $1.78 in Q2 2016. This was on revenue of $37.955 billion, above expectations of $37.18 billion, and well higher than the $30.404 billion reported last year.

Where the market was especially focused, and perhaps disappointed, is that the closely followed AWS segment reported net sales of $$4.1 billion, in line with expectations, however the operating income of $916 million, missing expectations of a $1 billion print, and just above last quarter’s print of $890 million. More troubling was the decline in margin, which dipped to 22.3% from 24.3% last quarter as a result of a 15% increase in expenses, likely due due to Amazon’s investment in data center infrastructure.

Also notable is that while total LTM Free Cash Flow of $9.7bn rose 26%, FCF less finance lease principal repayment and capital lease assets, was just $1.5 billion, a drop of 48% Y/Y.

Most importantly, Amazon also reported Q3 net sales guidance of $39.25 to $41.75 billion, relative to the estimate of $39.97 billion as well as an operating income range of a loss of $(400) million to +$300 million, compared with $575 million in third quarter 2016. According to Bloomberg, Amazon’s guidance was disappointing, especially its projection of a potential loss in the third quarter. Its full guidance:

Offsetting the poor guidance was AMZN’s gross margins, which were relatively healthy at 38.27%, narrowly exceeding the 38.1% estimate. Amazon’s gross margins have been rising gradually over the past decade, from under 30 percent in 2014 and under 25 percent in 2010. But with its flimsy guidance, the company may be signalling that it is getting ready to enter into another investment cycle, with expenses rising faster than sales. That, according to Bloomberg, makes investors nervous.