New York — Amazon on Wednesday reported strong increases in profits and net sales during its fiscal first quarter, supported by higher growth in its prominent segments Cloud computing unit.
The e-commerce and technology company said sales at its cloud computing unit rose 28% from January to March, the fastest increase in 15 quarters. Amazon Web Services posted 24% sales growth in the fourth quarter, which followed the division’s 20% growth in the third quarter.
The Seattle-based company also offered an upbeat outlook for net sales in the current quarter, beating analysts’ estimates. However, shares fell about 2% in after-hours trading before rising about 3%.
Investors have been closely monitoring Amazon’s quarterly earnings to see if the company will turn a profit Investing 200 billion dollars In the field of artificial intelligence, robotics, semiconductors and satellites are beginning to bear fruit. This year’s planned spending represents a 60% increase over Amazon’s $128 billion in capital spending last year and spooked investors, sending the stock down 11% in after-hours trading when it was announced in February.
CEO Andy Jassy defended the spending during the previous quarterly earnings call, saying Amazon expects long-term returns on its invested capital.
The results of the last quarter confirmed that demand continues to grow Amazon services and technologies.
“We are in the middle of some of the biggest transformations of our lives, we are well-positioned to lead, and I am very optimistic about what lies ahead for our customers and Amazon,” Jassy said in a statement on Wednesday.
Amazon reported its first-quarter earnings on the same day that three other tech giants — Microsoft, Meta and Alphabet — reported their earnings, giving investors a read on AI spending and cloud growth across the industry.
The big deals Amazon signed with OpenAI, Anthropic, and Meta this month have given the company strong momentum.
Amazon announced what it called “major expansion” OpenAI, the maker of ChatGPT, announced its partnership on Tuesday, a day after the AI company said it would ease its ties with longtime backer Microsoft.
Last week, Anthropic agreed to commit More than 100 billion dollars To Amazon’s cloud platform AWS over the next 10 years to train and manage an AI company Cloud Chatbot. Amazon said the partnership will allow Anthropic to secure up to 5 gigawatts of Trainium chips from Amazon to train and run its AI models.
Also last week, Amazon said Meta, which owns Instagram, WhatsApp and Facebook, had signed an agreement to run an AI agent on AWS’s Graviton chips.
However, like other retailers, Amazon faces higher tariff costs due to President Donald Trump’s foreign trade policies. Also, the rise in shipping costs, with the impact of the Iranian war on oil and fuel prices, may lead to a reduction in the company’s revenues from e-commerce.
Amazon said this month it would enforce Fuel and logistics surcharge of 3.5% On certain third-party sellers who use its platform. The temporary fees became effective April 17 for many sellers who use Amazon’s fulfillment services, the company confirmed to The Associated Press.
Meanwhile, Amazon is speeding up order delivery times through a combination of robotics, AI technology and more efficient warehousing. In fact, fast delivery helped Amazon unseat Walmart in February as the nation’s largest company by revenue, according to Fortune magazine, which compiles a ranking of the top 500 U.S. companies by total revenue for their respective fiscal years.
A new, super-fast service called Amazon Now offers deliveries of orders from a selection of thousands of items in 30 minutes or less. The company said in February that the service is now available in various cities in India, Mexico and the United Arab Emirates, and is being tested in several communities in the United States and the United Kingdom.
The service has expanded to parts of Tokyo and eight major cities in Brazil, bringing Amazon Now’s total availability to tens of millions of customers in nine countries, the company said on Wednesday. Amazon indicated that it plans to continue expanding the service in the United States and around the world this year.
Amazon It reported earnings of $30.3 billion, or $2.78 per share, for the three-month period ended March 31. This compares to $17.1 billion, or $1.59 per share, in the same period last year.
Net sales rose 17% to $181.5 billion in the quarter compared to $155.7 billion in the same quarter last year.
Analysts were expecting $1.63 per share on sales of $177.28 billion, according to analysts polled by FactSet.
Revenue from Amazon Web Services It reached $37.58 billion. Analysts had expected $36.6 billion, according to FactSet.
For the current quarter, Amazon said it expects net sales to be in the range of $194 billion to $199 billion.
This means an increase of 16% to 19% over the same quarter last year. Analysts were expecting $188.96 billion in the current period, according to FactSet.