Amazon reports strong first-quarter growth, driven by cloud and Prime Video advertising

Amazon reported robust results in the first quarter of 2024, with revenue of US$ 143.31 billion, an increase of 13% compared to the same period a year earlier. Net income reached US$ 10.43 billion, or US$ 0.98 per share, significantly exceeding Wall Street analysts' expectations, which forecast US$ 0.84 per share.

“It was a good start to the year across all business sectors, and this can be seen in both customer experience improvements and” financial results, Amazon CEO Andy Jassy said in a statement.

The Seattle-based e-commerce giant has delivered above-expected results during the holiday shopping period, when it noted strong consumer spending, aided by discounts and faster delivery times.

According to Brian Olsavsky, chief financial officer of Amazon, American customers are being “very careful” their spending, seeking promotions and opting for more economical products.He pointed out that the company is observing, “particularly”, a reduction in spending in Europe.

AWS accelerating

Amazon Web Services (AWS), the company's cloud computing division, reported sales of US$ 25.04 billion in the first quarter, up 17% from the same period a year earlier. AWS, whose customers are primarily businesses, has been the cornerstone of Amazon's strategy in the competitive artificial intelligence race between major technology companies.

Jassy said AI capabilities have re-accelerated the growth rate of AWS, which is now on track to reach US$ 100 billion in annual revenue. Hours before the results were released, Amazon announced the full launch of an enterprise chatbot called Q, which promises to help employees be more productive at work.

Advertising on the rise, including Prime Video

Sales in the company's online advertising business jumped 24%, driven mainly by sponsored product ads. Olsavsky pointed out that Amazon, which began running ads on Prime Video in late January, currently has a “leve” ads on the streaming service compared to TV or other providers.

“Adverts are doing well and attracting several new advertisers who did not use Amazon” advertising services, the chief financial officer said, referring to the Prime Video initiative, which allows customers to avoid ads for an additional monthly fee of US$ 2.99.

Amazon shares rose about 2% in trading after the market closed, reflecting investor confidence in the results presented.

For the second quarter, Amazon expects to record net sales between US$ 144 billion and US$ 149 billion, while analysts estimate US$ 150.2 billion.