Amazon fails to wow investors last night forecast lower margins than some investors hoped for, reflecting the costs of its growth strategy, and shares of the world’s largest online retailer plunged 8.5 per cent.

The company, which was widely believed to have enjoyed a stellar holiday season as it took market share from competitors, also posted fourth-quarter revenue that fell just shy of analysts’ estimates.

Net income in the fourth quarter was $416m (£261m), up from $384m. It now expects first-quarter operating profit between $260m and $385m.