Amazon’s cloud computing platform AWS is doing more than just AI, and that could spell trouble for Alphabet and Microsoft.
Shares of Amazon It rose about 3 percent in later hours., trading at $180 per share, shortly after the e-commerce giant reported better-than-expected first-quarter earnings. The company said in its earnings release that the increase was driven in part by its AWS division and its advertising services. Amazon shares are up 74% over the past year.
“A combination of companies renewing their efforts to modernize their infrastructure and the appeal of AWS’s AI capabilities is accelerating AWS’s growth rate (now in the $100 billion annual revenue run),” said Amazon CEO Andy Jassy. rate),” said Amazon CEO Andy Jassy. In a statement.
Sales of the company’s AWS division rose 17 percent year-over-year to $25 billion during the quarter. This increase in sales could position Amazon well to take on AI leaders like Microsoft and Alphabet.
Amazon’s Jesse told analysts during the company’s earnings call on Tuesday that companies are pursuing its AWS platform because it is a “relatively low-hanging fruit” that can help modernize the company’s infrastructure. can
“Our AWS customers are excited to leverage generative AI to transform their customer experiences and businesses,” said Jassy. “We see a lot of momentum on the AI front.”
Amazon seems to be banking on its AWS footprint. In its earnings release, the company said it plans to invest $5.3 billion in Saudi Arabia and $5 billion in Mexico over the next several years to build new infrastructure hubs. It also plans to invest $10 billion to build two data centers in Mississippi. The two centers are expected to create at least 1,000 jobs in the state, the company said.
Additionally, Jassy said during the company’s call that Amazon will continue to focus its advertising efforts to include sponsored content on its Prime Video platform. Its advertising business is boosting sales, “although it’s very early days.”
Seattle, Washington-based Amazon beat Wall Street expectations. For the period, it reported revenue of $143.3 billion, about $0.98 cents per share. Analysts forecast it would earn $142.5 billion, or about 0.84 cents per share, according to FactSet.
Credit : qz.com
