Amazon Web Services (AWS) again proved to be the leading growth engine for the company, with its cloud division reporting a 20% year-over-year revenue increase, surpassing $33 billion. This performance exceeded analyst expectations, and AWS generated $11.4 billion in operating revenue, accounting for roughly two-thirds of Amazon’s total operating profit. This achievement underscores Amazon’s critical role in its business model, despite intensifying competition from tech giants like Google and Microsoft. Additionally, Amazon’s digital advertising segment also performed well, experiencing a 24% revenue increase to $17.7 billion. Overall, Amazon’s revenue grew by 13% year-on-year to reach $180.17 billion, exceeding the $177.8 billion projected by analysts, as per LSEG data.
The earnings per share stood at $1.95, significantly above the average estimate of $1.57. Analysts from Pivotal Research commended Amazon’s results, noting, ‘Amazon has a deep moat around their core business powered by unparalleled size.’ The company indicated positive spending guidance, highlighting healthy organic growth prospects in both its high-margin AWS division and its expanding advertising segment. Ahead of the earnings report, investors were attentive to AWS’s performance amid escalating competition from Google Cloud and Microsoft Azure, which reported a 34% growth in their cloud business during the same timeframe. Following the earnings announcement, Amazon’s stock surged by 40%, reflecting the fierce competition among major cloud providers to capitalize on the rising demand for enterprise AI.
Furthermore, Amazon raised its capital expenditure forecast to $125 billion by 2025, up from a prior estimate of $118 billion, demonstrating its commitment to advancing AI and cloud technologies.
