July 21, 2024

Political Commentary

News Politics Business Sports

Amazon predicts cloud growth will gain steam as earnings bounce back

2 min read

Unlock the Editor’s Digest for free

Amazon’s bumper holiday season and forecasts for accelerating cloud growth boosted its shares as earnings rebounded from last year.

Sales at Amazon’s closely watched cloud computing division AWS, a critical profit driver for the business, rose 13 per cent to $24.2bn in the three months to December, a slight increase from 12 per cent growth last quarter.

A prolonged slowdown in cloud growth came as customers began looking for ways to cut costs, although the big cloud computing providers — Amazon, Microsoft and Google — are eyeing demand for generative AI as a way to kick-start sales. Despite the increase, AWS sales growth remains far below the 40 per cent reported at the end of 2021.

The acceleration in AWS sales growth will “continue into 2024” as the pace of customer cost-cutting slows, said Amazon chief financial officer Brian Olsavsky. He said the company was seeing “significant interest” in its generative AI services, but he declined to disclose what impact that has had on cloud growth. 

Amazon shares, which are up about 50 per cent in the past 12 months, rose as much as 9 per cent after the earnings report on Thursday.

The Seattle-based company reported a rebound in pre-tax earnings, which climbed to $13.2bn compared with $2.7bn in the same period in 2022, well ahead of analysts’ expectations for $10.4bn. Overall, Amazon’s revenue rose 14 per cent to $170bn, ahead of analysts’ forecasts for $166.3bn.

Looking ahead to the first quarter of 2024, Amazon said it expected revenues of between $138bn-$143.5bn and pre-tax earnings of between $8bn-$12bn, broadly in line with analysts’ forecasts.

Amazon’s North American business, which includes its online store, swung back to an operating profit from losses a year ago. The segment’s improving margins have been helped by efforts to cut costs, a reorganisation of its vast…



2024-02-01 17:24:40

All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator


Read more from original source here…

Leave a Reply

Copyright © All rights reserved. | Newsphere by AF themes.