Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | David Paul Morris Bloomberg | Getty Images
Amazon The company’s shares rose 7% on Friday, near a record high, after the company reported better-than-expected earnings, driven by growth in its cloud computing and advertising businesses.
The stock is up about 32% this year, hitting $200.50 on Friday. The stock’s highest closing price was $200, a level the stock hit twice in July.
Revenue for the quarter rose 11% to $158.9 billion, exceeding the $157.2 billion expected by analysts surveyed by LSEG. Profit of $1.43 was higher than analysts’ average estimate of $1.14.
Sales of Amazon’s Web Services cloud business grew 19% to $27.4 billion, slightly lower than analysts’ expectations, according to StreetAccount. That’s up from 12% a year ago but lags rival growth Microsoft and Googleof which cloud revenue grew by 33% and 35% respectively. Microsoft’s Azure numbers include other cloud services.
Amazon’s capital spending rose 81% year over year to $22.62 billion as the company continued to invest in data centers and equipment such as NVIDIA Processors that power artificial intelligence products. Amazon has launched a variety of artificial intelligence products in its cloud and e-commerce businesses, and is also expected to launch a new version of its Alexa voice assistant powered by generative artificial intelligence.
Analysts at Roth MKM wrote in a note after the conference: “Amazon has integrated artificial intelligence into the most diverse technology areas of any large enterprise, with interests in e-commerce, advertising, subscriptions, online movies and the cloud. Billions of dollars in revenue. They rate the stock a buy.
Amazon Chief Financial Officer Brian Olsavsky said on an earnings call that the majority of the company’s 2024 capital expenditures will be used to support growing demand for technology infrastructure.
Chief Executive Andy Jassy said the company plans to spend about $75 billion in capital expenditures in 2024, and he suspects it will spend more next year.
“The growth here is really driven by generative artificial intelligence,” Jassy said on the call. “This is a really big opportunity, maybe a once-in-a-lifetime opportunity,” he said, noting that shareholders “will “We are pleased with the long-term goals we are actively pursuing.”
Advertising is another highlight. unit sales status expand The quarter grew 19% to $14.3 billion, in line with expectations and exceeding growth in Amazon’s core retail business.
Amazon’s advertising growth is approximately Yuangrew by 18.7%, faster than Google’s growth, and Google’s advertising revenue grew by 15%. breakThe sales volume is also Jumped An increase of 15% compared with the same period last year.
Amazon expects revenue this quarter to be between $181.5 billion and $188.5 billion, an annual increase of 7% to 11%. The midpoint of that range was $185 billion, below analysts’ average estimate of $186.2 billion, according to LSEG.
—CNBC’s Ari Levy contributed to this report
watch: Amazon’s expectations rise