Amazon.com, Inc. (NASDAQ:AMZN) stock rose 10.84% (As on August 4, 12:02:25 AM UTC-4, Source: Google Finance) after the company reported sales growth and profit that beat Wall Street’s expectations as the company delivered goods faster and more cheaply to shoppers while recent cloud-computing headwinds began to subside. Amazon’s cloud-computing division has been key. In recent months, Amazon Web Services (AWS) saw its sales growth slow as wary businesses scrutinized their cloud bills. Olsavsky said such “cost optimization” continued, but big companies were embracing the cloud anew, a lift to the division this spring and summer. The AWS unit beat estimates of around $21.7 billion in second-quarter cloud sales, increasing them 12% to $22.1 billion. The company told analysts every business inside Amazon has multiple generative-AI initiatives underway, including customer-facing and cost-slimming efforts. Amazon said it delivered a net income of $6.7 billion in the quarter, reversing the $2 billion loss it recorded in the same period last year. Last year’s loss was due to Amazon marking down a significant investment in the electric car company Rivian Automotive Inc.
He said AWS’s spending on the technology represented a “significant” amount of the more than $50 billion in capital investments Amazon projected for 2023. Such investments, offset by lower fulfillment expenditures, are down from $59 billion in 2022. Still, the boost that Amazon’s cloud could reap from powering businesses’ AI demand has yet to materialize in full.
AMZN in the second quarter of FY 23 has reported the adjusted earnings per share of 65 cents, beating the analysts’ estimates for the adjusted earnings per share of 35 cents. The company had reported the adjusted revenue growth of 11 percent to $134.4 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $131.5 billion.
The company forecast current-quarter net sales in the range of $138 billion to $143 billion. Analysts polled by Refinitiv were expecting revenue of $138.25 billion.
Longer-term, Amazon aims to turn one unit, its $35 billion in yearly gross business-to-business e-commerce sales, into $100 billion.
Amazon has sought cost cuts all, with 27,000 people affected by layoffs, or what had been 9% of its roughly 300,000-person staff. It recently revealed more reductions at Amazon Fresh stores while searching for months for the right grocery strategy.
On the other hand, an analyst from Needham & Company maintained Amazon.com at ‘buy’ with a price target of $160.00