Amazon’s (AMZN, Financial) shares skyrocketed 7% to a near-record high on Friday, as the world’s largest internet retailer soundly whipped Wall Street’s estimates of quarterly earnings fueled by immense growth in cloud computing and advertising segments. Amazon shares hit $199.50 today, only a half dollar short of its all-time high of $200 achieved in July. Overall, the stock has risen by about 32% this year.
Last quarter, its net sales went up to $158.9 billion, which was up 11% from the previous year’s similar quarter and above the forecast of $157.2 billion. Net income was $6.07 billion, and earnings per share of $1.43 exceeded the market expectation of $1.14. Amazon Web Services cloud business sales reached $27.4 billion, up from 12% a year ago but slightly below analyst’s expectations and below significantly higher growth rates for cloud competitors Microsoft (MSFT, Financial) and Alphabet (GOOG, Financial) which recorded 33 and 35% growth, respectively.
With these financial achievements, Amazon is maintaining a strong focus on infrastructure investment, with capital expenditure up 81% YoY at $22.62bn. This investment mainly includes expanding data centers and buying superior NVIDIA (NVDA, Financial) chips to boost its artificial intelligence services. This technology is being addressed across all cloud computing businesses and e-commerce operations, and it is thought that a new version of the voice-enabled assistant Alexa will also soon appear.
Amazon’s CFO, Brian Olsavsky, noted on the call that a large part of the company’s capex in 2024 will be required to meet growing needs in the technological platform, which indicates Amazon’sAmazon’s new efforts in the development of advanced technologies and artificial intelligence.
This article first appeared on GuruFocus.
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