Amazon reassures Wall Street with its speech on AI… and big profits

(Boursier.com) — Amazon yesterday evening revealed third quarter sales and profits higher than market expectations. The stock climbed after the market on Wall Street, despite a relative disappointment in cloud revenues, which were a little less dynamic than expected. The American online commerce giant announced an increase of 13% in its quarterly turnover to 143.1 billion dollars, against a consensus of 141.4 billion. AWS posted revenue of $23.1 billion over this period from July to September, close to market expectations. Andy Jassy, ​​CEO of the company, said AWS’s growth continues to stabilize. Amazon also wanted to highlight the success of its Prime Day promotions. Quarterly net profit soared to $9.9 billion, compared to $2.9 billion a year earlier, as the group cut costs by sharply reducing its workforce. Earnings per share were 94 cents versus 58 cents consensus. The operating margin stood at 7.8%, clearly above expectations (5.5%).

For the current quarter, Amazon expects revenues ranging from 160 to 167 billion dollars, against 166.6 billion consensus. The theme of artificial intelligence obviously dominated last night. CEO Andy Jassy said AI represents an opportunity worth tens of billions for cloud business Amazon Web Services, which this year launched Bedrock AI, a service streamlining the development of large language models. “Our generative AI business is growing very, very quickly,” Jassy assured. Also remember that Amazon recently invested $1.25 billion in Anthropic, a competitor to Open AI, creator of ChatGPT. Under the agreement, Anthropic will use AWS technology and make its tools available to cloud customers. The investment could ultimately reach $4 billion. AI could therefore provide the growth spurt sought by AWS… At least that’s what management hopes.

Meanwhile, AWS’ quarterly sales increased 12% year-over-year and the division’s operating profit also rose to $7 billion (+29%). Thus, AWS posted growth slightly higher than that of the previous quarter, while its operating profit beat… the consensus by $1.3 billion.