Amazon.com, the Seattle-based e-commerce giant, reported quarterly results that exceeded Wall Street’s expectations. The company saw a substantial increase in interest in artificial intelligence, which ultimately drove growth in its cloud-computing sector. Despite its current-quarter revenue forecast falling below expectations, Amazon’s stock price rose almost 3% in extended trading. The tech company’s Chief Financial Officer, Brian Olsavsky, mentioned that capital spending would increase throughout the year, emphasizing the need to invest upfront to build out AI offerings to meet customer demand.
Amazon Web Services (AWS), the largest provider of cloud-computing services, reported a 17% rise in revenue to $25.0 billion in the first quarter, surpassing expectations. This growth, coupled with the appeal of AWS’s AI capabilities, has reaccelerated the company’s growth rate. CEO Andy Jassy stated that AWS is on track to achieve $100 billion in annual sales. Despite fierce competition from the likes of Alphabet and Microsoft-backed OpenAI, Amazon continues to lead the way in cloud computing.
Amazon’s decision to forgo announcing a dividend, unlike its Big Tech rivals, sets it apart in the industry. The market responded positively to dividend announcements from companies like Alphabet and Meta Platforms, driving up their stock prices. Amazon and Tesla are the only members of the so-called Magnificent Seven tech stocks that do not offer dividends. Despite this, Amazon’s stock has seen a 15% increase in 2024, outperforming the S&P 500. Furthermore, Amazon’s net income more than tripled to $10.4 billion in the first quarter, showcasing its financial strength and growth potential.
Employment and Future Outlook
Despite cutting jobs last year, Amazon saw an increase in its workforce, ending the quarter with 1.52 million employees. This growth indicates Amazon’s commitment to expanding its operations and services. Looking ahead, Amazon’s continued focus on AI, cloud computing, and customer demand bodes well for its future growth and profitability. With strong quarterly results and a positive outlook, Amazon remains a dominant force in the tech industry.