Amazon.comshares plunged after the company posted earnings that missed analyst expectations and revenue that barely beat forecasts.
The largest global online retailer had posted blow-out results in its fourth and first quarters, but investors had feared the momentum would stall this spring.
The online retailer reported second quarter earnings of 45 cents a share. Amazon earned 32 cents a share during the same period a year earlier.
Sales for the most recent quarter rose to $6.57 billion, up from $4.65 billion last year.
The company was seen earning 54 cents a share on revenue of $6.54 billion, according to a consensus eestimate from Thomson Reuters.
Amazon adjusted its current quarter revenue to between $6.9 billion to $7.63 billion. Analysts' consensus stood at $7.15 billion.
Shares of Amazon dropped more than 11 percent in extended trading Thursday. Get after-hour quotes for Amazon.com here.
The shares closed at $120.07 in the regular New York Stock Exchange session. Volume exceeded 8.3 million shares before the closing bell.
"It looks like the increase in operating expenses (that caused the miss in EPS). It kind of brings back fears that there would be overspending at Amazon on different operating projects or expenses," said BWS Financial Analyst Hamed Khorsand. "It seems like they're just taking a conservative approach (on their forecast)."
Frederick Moran at Benchmark Co said Amazon may have taken a particular hit on discounting merchandise. The online retailer faces greater competition from traditional store chains like Wal-Mart Stores and from Apple'srival iPad device, which also has electronic reading functions.
During the quarter, Amazon started selling the Kindle electronic reader at Target stores. The company also became engaged in a price battle with competitor Barnes & Noble, dropping the price of the Kindle by $70 to $189, just hours after Barnes & Noble said it would lower the price of its Nook e-reader by $60 to $199.
—AP and Reuters contributed to this story.