Amazon has reported a significant increase in its quarterly profit, doubling to $13.5 billion, driven by the strong performance of its Amazon Web Services (AWS) cloud computing division.
Despite Amazon's sales reaching $148 billion, which slightly missed market expectations, the company saw its shares decline by over four percent to $176.50 in after-market trading.
Amazon CEO Andy Jassy highlighted the progress made across various sectors, emphasizing the \"continued reacceleration in AWS growth.\" The AWS unit saw its revenue rise to $26.3 billion, up from $22.1 billion the previous year.
However, ad revenues fell short of projections, with $12.7 billion earned against an expected $13 billion. Retail, ads, and cloud computing remain Amazon's main financial pillars.
Analysts like Neil Saunders from GlobalData have expressed concerns about tighter outlooks, suggesting that while Amazon will stay profitable, the growth rate adding to its bottom line is slowing.
Similar patterns are observed among other tech giants. Microsoft shares dropped following their earnings, as their cloud division didn't meet expectations. Alphabet's parent company Google also saw its shares decline due to rising costs and slowing ad revenues.
Meta distinguishes itself by focusing its AI investments on enhancing its extensive digital advertising revenue streams, unlike Google, which is adjusting core ad operations.
In a surprising move, Amazon's AWS head, Adam Selipsky, left the company in June, with Matt Garman stepping in as the new leader. AWS holds 31% of the cloud computing market as of the end of 2023, yet faces increasing competition from Microsoft and Google, especially in the rapidly evolving AI landscape.
Despite the competition, AWS remains less prominent to the public eye compared to brands like ChatGPT or Google's Gemini, which are widely recognized in the AI market.
Reference(s):
cgtn.com
