

Credit: Unsplash
Amazon shares surged 6% on Friday following the company’s release of strong quarterly earnings, exceeding market expectations. Boosted by impressive growth in its cloud computing and advertising segments, Amazon’s stock hit a high of $200.50 during trading, close to its all-time peak. This latest rise brings Amazon’s stock gains to 32% for the year.
In the third quarter, Amazon posted $158.9 billion in revenue, surpassing analysts’ estimates of $157.2 billion, an 11% increase from last year. Earnings per share reached $1.43, significantly higher than the expected $1.14.
Key highlights of Amazon’s performance include:
- Cloud Services: Amazon Web Services (AWS) revenue rose 19% to $27.4 billion, continuing to show strong demand, although it slightly trailed competitors Microsoft and Google, whose cloud segments grew by over 30%.
- Advertising: Amazon’s advertising revenue grew by 19% to $14.3 billion, outpacing the growth rates of several major competitors, including Google and Snap. This segment continues to expand faster than Amazon’s core retail business, underscoring the company’s strength beyond e-commerce.
Amazon’s significant investments in AI technology and data infrastructure were also in the spotlight. Capital expenditures (capex) rose sharply by 81% year-over-year to $22.6 billion, largely directed toward advanced technologies like Nvidia processors to support new AI-driven features. CEO Andy Jassy noted the “once-in-a-lifetime” opportunity AI represents, indicating a capex budget of $75 billion for 2024, with even higher investments likely as Amazon continues to expand its AI footprint.
Looking ahead, Amazon projects revenue of $181.5 billion to $188.5 billion for the fourth quarter, aiming for 7% to 11% growth compared to last year. This forecast fell slightly below analyst predictions, but analysts maintain a positive outlook, emphasizing Amazon’s long-term potential in AI, cloud computing, and advertising.
Amazon’s commitment to innovation and infrastructure underscores its pursuit of long-term growth in diverse technology areas, and its leadership believes that this strategy will continue to benefit shareholders and enhance Amazon’s offerings across sectors.
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