Amazon Surges After Exceeding Earnings Expectations


Shares of Inc. (NASDAQ:AMZN) rallied in after-hours trading following the company’s first-quarter earnings report, which surpassed Wall Street estimates on both revenue and earnings fronts.

Buoyed by robust performance in its cloud computing division, Amazon continued the trend of impressive results among Big Tech firms, propelling its stock as much as 5% higher.

Amazon highlighted the ongoing success of its leading Amazon Web Services segment, projecting an annual revenue trajectory of $100 billion. Key metrics from Amazon’s fiscal first quarter, according to Bloomberg data, include:

  • Net Sales: $143.3 billion (vs. expected $142.6 billion, compared to $127.4 billion in Q1 2023)
  • Adjusted Earnings Per Share: $0.98 (vs. expected $0.83, compared to $0.31 in Q1 2023)
  • Amazon Web Services: $25 billion (vs. expected $24.1 billion, compared to $21.4 billion in Q1 2023)
  • Advertising: $11.8 billion (in line with expectations, compared to $9.5 billion in Q1 2023)

CFO Brian Olsavsky indicated a significant uptick in overall capital expenditure for the year, compared to the nearly $50 billion in 2023. This surge is driven by heightened infrastructure costs to support AWS growth, particularly in generative AI technologies.

Olsavsky noted a rise in capex to $14 billion for the quarter, with expectations for further increases in subsequent periods. Strong demand in AWS, with customers increasingly opting for longer-term contracts with larger commitments, many featuring generative AI components, has been observed.

Amazon’s earnings report follows impressive quarters from cloud rival and AI contender Microsoft Corporation (NASDAQ:MSFT) and Google parent Alphabet Inc. (NASDAQ:GOOG, NASDAQ:GOOGL), both of which exceeded expectations and announced dividend increases.

Positioning itself as an AI frontrunner, Amazon continues to invest in this space, recently boosting its stake in AI startup Anthropic to $4 billion. Leveraging its dominance in cloud computing, Amazon aims to seize market share and introduce new consumer services, mirroring strategies adopted by its peers.

Amazon’s stock, which joined the Dow Jones Industrial Average (^DJI) in February, has surged approximately 20% year-to-date.

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