Amazon reported mixed results for its second quarter of 2024, with strong profit growth but disappointing revenue figures. The e-commerce giant’s net income doubled to $13.5 billion, surpassing market expectations. This surge was primarily driven by the company’s cloud computing division, Amazon Web Services (AWS), which saw a 19% year-over-year increase in revenue to $26.3 billion.However, Amazon’s total revenue of $148 billion, while representing a 10% increase from the same period last year, fell short of analyst projections. This discrepancy led to a significant drop in the company’s stock price, with shares falling between 4% to 6% in after-hours trading.The company’s forecast for the third quarter further disappointed investors. Amazon projects revenue between $154 billion and $158.5 billion for Q3, which falls below the average analyst estimate of $158.24 billion. This guidance suggests growth of 8% to 11% compared to the same period last year.Amazon CEO Andy Jassy commented on the results, stating, “We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth”. Despite this optimism, the lower-than-expected revenue forecast has raised concerns about potential weakness in demand for cloud computing services, as businesses remain cautious about costs in an uncertain economic environment.The company is heavily investing in artificial intelligence (AI) technologies, including a $4 billion investment in AI startup Anthropic. Amazon sees AI as a significant growth opportunity, particularly for its AWS division, with Jassy noting that much of the “world-changing AI will be built on top of AWS”.While Amazon’s e-commerce segment saw slower growth, expanding by only 5% year-over-year, the company’s advertising revenue increased by 20% to $12.77 billion during the quarter. This mixed performance across different segments reflects the complex challenges and opportunities facing the tech giant in the current economic climate.
Key points
- Amazon’s Q2 net income doubled to $13.
- Revenue of $148 billion fell short of analyst projections, causing a stock price drop.
- Amazon Web Services (AWS) saw 19% growth, reaching $26.
- The company’s Q3 revenue forecast of $154-$158.
5 billion, exceeding expectations.
3 billion in revenue.
5 billion was below Wall Street estimates.
Contradictions👾While most sources reported Amazon’s stock falling between 4% to 6% after the earnings report, one source mentioned a 6% drop specifically after market close.
