Amazon’s profits skyrocketed in the first quarter of 2024, as announced by the company on Tuesday. This marks another strong financial performance from the retail giant, with artificial intelligence and advertising sales driving the boost.
Total revenue for Amazon in the first quarter of this year was reported at $143.3 billion, a 13% increase from the same period in 2023, exceeding Wall Street’s expectations of $142.65 billion. The e-commerce giant saw a remarkable increase of over 200% to $15 billion, with net profit more than tripling to $10.4 billion in 2023 from $3.17 billion in the same period.
CEO Andy Jassy, in a statement with the report, mentioned that Amazon’s focus on AI is “reaccelerating,” especially in Amazon Web Services (AWS), the company’s cloud computing segment. AWS revenue surged 17% year over year to $25 billion, representing 62% of total operating profit. Jassy expressed optimism about the potential for growth in generative AI.
While AWS saw a tailwind in growth, executives noted a recent slowdown in the sector due to the pandemic recovery, with companies enhancing cloud infrastructure for remote work. The stabilization of this trend and the demand for AI could further expand Amazon’s cloud services.
Advertising sales also saw a notable 24% year-over-year increase to $11.8 billion, driven by expansion in advertising, including on Prime Video.
As Amazon strengthens its cloud computing and AI capabilities, it anticipates increased capital expenditures to support infrastructure needs, with projections to rise in subsequent quarters of the fiscal year.
Additionally, the company announced plans to invest $11 billion in constructing more data centers in Indiana, creating at least 1,000 jobs there. Amazon continues to enhance its AI offerings through partnerships, like the one with chipmaker Nvidia.
Investors responded positively to Amazon’s recent cost-cutting measures, including significant layoffs since late 2022. These initiatives have resulted in a 5% rise in shares during after-hours trading.
Source: www.theguardian.com
