Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Amazon forecasts bright Q3 on resilient cloud sales, shopping trends

Amazon forecasts bright Q3 on resilient cloud sales, shopping trends

By Jeffrey Dastin and Chavi Mehta

(Reuters) Inc on Thursday 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 shares surged 9% on the news, extending its stock market value more than $120 billion in after-hours trading.

Facing an array of challenges, the company has aimed to keep its mantle as the world’s biggest cloud provider and online retailer.

Amazon recently answered AI front-runners Google and Microsoft with rival services of its own, drawing thousands of customers and touting the breadth of technology it has on offer, similar to what is powering the human-like chatbot ChatGPT.

In retail, Amazon has reorganized its fulfillment network and opened warehouses for same-day shipping closer to big metro areas, saving time and costs on delivery.

Brian Olsavsky, Amazon’s chief financial officer, said on a call with reporters that faster speeds have meant Prime loyalty customers are “shopping more often.”

For the second quarter, Amazon’s revenue grew 11% to $134.4 billion, beating estimates of $131.5 billion from analysts polled by Refinitiv.

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.

CEO Andy Jassy said in a statement, “Our AWS growth stabilized.”

The unit beat estimates of around $21.7 billion in second-quarter cloud sales, increasing them 12% to $22.1 billion. Its rivals posted bigger jumps off smaller bases: 28% growth in Alphabet’s June-quarter cloud revenue and a 26% quarterly increase for Microsoft’s Azure.

Arun Sundaram, an equity analyst at CFRA Research, said the results showed Amazon was holding its own, including in so-called generative AI that can create new text, images and other content from past data.

“We can put any negative narrative to rest,” Sundaram said, adding AI’s potential “should benefit all the large tech companies.”

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

Jassy told analysts every business inside Amazon has multiple generative-AI initiatives underway, including customer-facing and cost-slimming efforts.

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. Thomas Monteiro, an analyst at said. “In Q3, it is likely that companies will have to start showing results on that front.”

In e-commerce, consumers have acted with some reserve for months, putting off discretionary purchases and shopping for value. CFO Olsavsky said household budgets remain tight, but headwinds from inflation were easing.

Amazon is now expecting a bump from its biggest sales day ever as part of last month’s marketing blitz for loyalty shoppers known as Prime Day.

Monteiro said consumer sales were looking healthy in and outside Amazon for the back half of 2023.

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, Jassy told analysts.

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.

The company reported a quarterly profit of $6.7 billion, nearly double what analysts expected.

(Reporting by Chavi Mehta in Bengaluru and Jeffrey Dastin San Francisco; Additional reporting by Noel Randewich; Editing by Arun Koyyur, Aurora Ellis and Chris Reese)


Recent Post: