As recent cloud-computing headwinds started to ease, Amazon.com Inc. on Thursday reported sales growth and earnings that above Wall Street's forecasts. The business also offered shoppers faster and more affordable delivery of their purchases.
As a result of the news, Amazon's stock price increased by 9% and reached a high of more than $120 billion in after-hours trading.
Despite numerous obstacles, the company has worked to maintain its position as the largest cloud provider and online retailer in the world.
With rival services, Amazon recently responded to AI leaders Google and Microsoft, attracting thousands of users and showcasing the range of technology that underpins ChatGPT, an AI chatbot that resembles a human.
In order to reduce delivery times and costs, Amazon has reorganised its fulfilment network for retail and created same-day shipping warehouses closer to major metro regions.
On a conference call with reporters, Amazon's CFO, Brian Olsavsky, claimed that because of better speeds, Prime loyalty users are "shopping more frequently."
Amazon's revenue for the second quarter increased 11% to $134.4 billion, exceeding the $131.5 billion analysts surveyed by Refinitiv had predicted.
The primary player has been Amazon's cloud computing business. Amazon Web Services (AWS) has recently experienced a slowdown in sales growth as cautious firms scrutinised their cloud expenses. Olsavsky claimed that while such "cost optimisation" persisted, large corporations were once again adopting the cloud, giving the division a boost this spring and summer.
CEO Andy Jassy said in a statement, "Our AWS growth stabilized."
Sales of cloud services in the second quarter were 12% more than expected at $22.1 billion, beating predictions of roughly $21.7 billion. Competitors reported greater gains from smaller starting points, including 28% rise in Alphabet's cloud revenue for the June quarter and a 26% quarterly increase for Microsoft's Azure.
The findings, according to Arun Sundaram, an equity analyst at CFRA Research, showed that Amazon was competing successfully, including in so-called generative AI, which can generate fresh text, images, and other content from previously collected data.
"We can put any negative narrative to rest," Sundaram said, adding AI's potential "should benefit all the large tech companies."
Every department within Amazon, according to Jassy, is working on a number of generative AI projects, including ones aimed at improving customer service and cutting costs.
A "significant" portion of the more than $50 billion in capital investments Amazon estimated for 2023, according to him, will be spent by AWS on the technology. These investments are down from $59 billion in 2022, which is compensated by a decrease in fulfilment costs.
However, the boost that businesses' demand for AI could give Amazon's cloud hasn't fully manifested yet. According to Thomas Monteiro, an analyst with Investing.com. "Companies will probably have to start demonstrating results on that front in Q3,"
Consumers have been acting somewhat cautiously in e-commerce for months, delaying discretionary purchases, and looking for deals.
Although household budgets are still tight, CFO Olsavsky claimed that inflationary pressures were lessening.
As part of the marketing campaign for loyal customers known as Prime Day last month, Amazon is now anticipating a boost from its biggest sales day ever.
For the second half of 2023, according to Monteiro, consumer sales both inside and outside of Amazon appear to be strong.
According to the corporation, net revenues for the current quarter will be between $138 billion and $143 billion. Refinitiv's poll of analysts found that they predicted revenue of $138.25 billion.
Longer term, according to Jassy, Amazon wants to grow its $35 billion in annual gross business-to-business e-commerce sales to $100 billion.
In order to reduce costs, Amazon has laid off 27,000 workers, or 9% of its over 300,000-person workforce.
It has been looking for months for the best grocery approach when it recently unveiled significant discounts at Amazon Fresh outlets.
The corporation announced a $6.7 billion quarterly profit, more than double what experts had predicted.
(Source:www.straitstimes.com)
As a result of the news, Amazon's stock price increased by 9% and reached a high of more than $120 billion in after-hours trading.
Despite numerous obstacles, the company has worked to maintain its position as the largest cloud provider and online retailer in the world.
With rival services, Amazon recently responded to AI leaders Google and Microsoft, attracting thousands of users and showcasing the range of technology that underpins ChatGPT, an AI chatbot that resembles a human.
In order to reduce delivery times and costs, Amazon has reorganised its fulfilment network for retail and created same-day shipping warehouses closer to major metro regions.
On a conference call with reporters, Amazon's CFO, Brian Olsavsky, claimed that because of better speeds, Prime loyalty users are "shopping more frequently."
Amazon's revenue for the second quarter increased 11% to $134.4 billion, exceeding the $131.5 billion analysts surveyed by Refinitiv had predicted.
The primary player has been Amazon's cloud computing business. Amazon Web Services (AWS) has recently experienced a slowdown in sales growth as cautious firms scrutinised their cloud expenses. Olsavsky claimed that while such "cost optimisation" persisted, large corporations were once again adopting the cloud, giving the division a boost this spring and summer.
CEO Andy Jassy said in a statement, "Our AWS growth stabilized."
Sales of cloud services in the second quarter were 12% more than expected at $22.1 billion, beating predictions of roughly $21.7 billion. Competitors reported greater gains from smaller starting points, including 28% rise in Alphabet's cloud revenue for the June quarter and a 26% quarterly increase for Microsoft's Azure.
The findings, according to Arun Sundaram, an equity analyst at CFRA Research, showed that Amazon was competing successfully, including in so-called generative AI, which can generate fresh text, images, and other content from previously collected data.
"We can put any negative narrative to rest," Sundaram said, adding AI's potential "should benefit all the large tech companies."
Every department within Amazon, according to Jassy, is working on a number of generative AI projects, including ones aimed at improving customer service and cutting costs.
A "significant" portion of the more than $50 billion in capital investments Amazon estimated for 2023, according to him, will be spent by AWS on the technology. These investments are down from $59 billion in 2022, which is compensated by a decrease in fulfilment costs.
However, the boost that businesses' demand for AI could give Amazon's cloud hasn't fully manifested yet. According to Thomas Monteiro, an analyst with Investing.com. "Companies will probably have to start demonstrating results on that front in Q3,"
Consumers have been acting somewhat cautiously in e-commerce for months, delaying discretionary purchases, and looking for deals.
Although household budgets are still tight, CFO Olsavsky claimed that inflationary pressures were lessening.
As part of the marketing campaign for loyal customers known as Prime Day last month, Amazon is now anticipating a boost from its biggest sales day ever.
For the second half of 2023, according to Monteiro, consumer sales both inside and outside of Amazon appear to be strong.
According to the corporation, net revenues for the current quarter will be between $138 billion and $143 billion. Refinitiv's poll of analysts found that they predicted revenue of $138.25 billion.
Longer term, according to Jassy, Amazon wants to grow its $35 billion in annual gross business-to-business e-commerce sales to $100 billion.
In order to reduce costs, Amazon has laid off 27,000 workers, or 9% of its over 300,000-person workforce.
It has been looking for months for the best grocery approach when it recently unveiled significant discounts at Amazon Fresh outlets.
The corporation announced a $6.7 billion quarterly profit, more than double what experts had predicted.
(Source:www.straitstimes.com)
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