Amazon reported a loss of US$126 million during the second quarter of the year, more than double than what the company projected it would lose.

The company predicts that losses would total between US$410 and US$810 million next quarter, which is more than 16 times what it had lost during the third quarter of 2013.

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Amazon's sales have increased to 23 percent at US$19.3 billion, but its expenditures climbed to 24 percent at US$19.4 billion.

Currently, Amazon shares have tumbled down to 10 percent.

Reports said that Amazon co-founder and CEO Jeff Bezos's investments have been detrimental to the company. Bezos invested in cloud computing, warehouses and gadgets, which include the new Fire smartphone. The shareholders of the company have been patiently waiting for these investments to pay off, but Bezos' strategies have yet to be proven profitable.

Michael Pachter, an analyst at Wedbush Securities Inc., predicted the loss and said there is a time when investors do not see their investments' payoffs.

"All of us understand making investments, and then there's a point where investors don't know what the payoff is," Pachter said. "What if they get to US$200 billion in revenue and still don't have profit?

Whether sales prove to be strong remains to be seen, but history has proven that Bezos sticks with a product and continues to invest in newer versions  even if its predecessor was not popular.

According to Sucharita Mulpuru, an analyst at Forrester Research, Amazon will continue to keep on putting money in capital-intensive investments despite the risks. 

"As long as there is money to pour into the business, they will be pouring money into the business," Mulpuru said.

CFO Tom Szutak shared that although they have been experiencing some financial turmoil as of late, Amazon Prime subscriptions are on the rise despite the significant mark up last March with subscription costs rising from US$79 to US$99.

Amazon Prime gives subscribers unlimited access to streamed TV shows and movies.

Szutak said Amazon plans investing in more than US$100 million on original video content for Amazon Prime this coming quarter.

TagsAmazon, Amazon Prime, Fire smartphone, Jeff Bezos, Tom Szutak