Amazon's Quarterly Profit Doubles Amid Growth in Cloud Business
Amazon announced on Thursday that its profit for the most recent quarter surged to $13.5 billion, driven by a resurgence in its Amazon Web Services (AWS) cloud computing division.
TroibNews 
Amazon's profit for the recently concluded quarter surged to $13.5 billion, benefiting from renewed momentum in its Amazon Web Services (AWS) cloud computing division, as announced on Thursday.
The e-commerce giant's revenue reached $148 billion, falling just short of high market expectations; consequently, shares dropped over four percent to $176.50 in after-market trading.
"We're continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth," said Amazon chief executive Andy Jassy.
AWS revenue grew to $26.3 billion, up from $22.1 billion in the same period the previous year, according to the earnings report.
The $12.7 billion generated from ads on the platform also fell short of expectations, with market predictions set at $13 billion.
Retail, advertising, and cloud computing are considered Amazon's key financial drivers.
"While Amazon has multiple levers it can pull, the outlook is becoming tighter," said GlobalData managing director Neil Saunders. "Amazon will remain very profitable but the pace at which it can add to the bottom line appears to be waning."
Amazon, alongside other tech giants investing in artificial intelligence, is also increasing its spending, a factor that investors are closely monitoring.
Microsoft also experienced a decline in shares this week after earnings figures revealed that its crucial cloud computing unit did not grow as robustly as anticipated.
Shares of Alphabet, Google's parent company, fell due to concerns over slowing ad revenue and rising costs following its earnings release.
"Meta stands out from other tech firms that have AI ambitions because it already brings in a massive amount of revenue from digital advertising," said Sonata Insights founder and chief analyst Debra Aho Williamson. "Unlike Google, which is grappling with making changes that will impact its core ad business, most of Meta's AI investments are either aimed at making advertising on its properties work better, or at building new features that could eventually become revenue drivers."
Adam Selipsky, the head of Amazon's AWS cloud computing business who was aiding the company's expansion into AI, unexpectedly left in June.
In a memo to staff, Selipsky expressed "mixed emotions" about his departure but felt that "given the state of the business and the leadership team, now is an appropriate moment for me to make this transition."
Amazon's sales and marketing executive Matt Garman has taken over as head of AWS.
AWS is a vital subsidiary for Amazon, profiting from the increasing demand for remote computing and AI services among businesses.
At the end of 2023, AWS held 31 percent of the cloud computing market, as reported by Stocklytics.
However, competitors Microsoft and Google are making strides with their cloud services.
The competition has intensified particularly with the introduction of ChatGPT-style AI services that cloud providers are offering to clients eager to join the AI revolution.
Despite AWS’s significance, it lacks public recognition and Amazon does not have prominent AI brands like ChatGPT or Google’s Gemini, which are being integrated into those companies' product lines.
Sanya Singh contributed to this report for TROIB News
The e-commerce giant's revenue reached $148 billion, falling just short of high market expectations; consequently, shares dropped over four percent to $176.50 in after-market trading.
"We're continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth," said Amazon chief executive Andy Jassy.
AWS revenue grew to $26.3 billion, up from $22.1 billion in the same period the previous year, according to the earnings report.
The $12.7 billion generated from ads on the platform also fell short of expectations, with market predictions set at $13 billion.
Retail, advertising, and cloud computing are considered Amazon's key financial drivers.
"While Amazon has multiple levers it can pull, the outlook is becoming tighter," said GlobalData managing director Neil Saunders. "Amazon will remain very profitable but the pace at which it can add to the bottom line appears to be waning."
Amazon, alongside other tech giants investing in artificial intelligence, is also increasing its spending, a factor that investors are closely monitoring.
Microsoft also experienced a decline in shares this week after earnings figures revealed that its crucial cloud computing unit did not grow as robustly as anticipated.
Shares of Alphabet, Google's parent company, fell due to concerns over slowing ad revenue and rising costs following its earnings release.
"Meta stands out from other tech firms that have AI ambitions because it already brings in a massive amount of revenue from digital advertising," said Sonata Insights founder and chief analyst Debra Aho Williamson. "Unlike Google, which is grappling with making changes that will impact its core ad business, most of Meta's AI investments are either aimed at making advertising on its properties work better, or at building new features that could eventually become revenue drivers."
Adam Selipsky, the head of Amazon's AWS cloud computing business who was aiding the company's expansion into AI, unexpectedly left in June.
In a memo to staff, Selipsky expressed "mixed emotions" about his departure but felt that "given the state of the business and the leadership team, now is an appropriate moment for me to make this transition."
Amazon's sales and marketing executive Matt Garman has taken over as head of AWS.
AWS is a vital subsidiary for Amazon, profiting from the increasing demand for remote computing and AI services among businesses.
At the end of 2023, AWS held 31 percent of the cloud computing market, as reported by Stocklytics.
However, competitors Microsoft and Google are making strides with their cloud services.
The competition has intensified particularly with the introduction of ChatGPT-style AI services that cloud providers are offering to clients eager to join the AI revolution.
Despite AWS’s significance, it lacks public recognition and Amazon does not have prominent AI brands like ChatGPT or Google’s Gemini, which are being integrated into those companies' product lines.
Sanya Singh contributed to this report for TROIB News
