Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | Bloomberg | Getty Images
Amazon The company's shares jumped 6% on Friday after the company reported better-than-expected earnings, driven by growth in its cloud computing and advertising businesses.
The stock is up about 32% for the year. Shares briefly touched $200.50 on Friday, putting them near their all-time high. Its highest close was $200, a mark the stock reached twice in July. The stock closed at $197.93 on Friday.
Revenue rose 11% in the quarter to $158.9 billion, beating analysts surveyed by LSEG's estimate of $157.2 billion. Earnings of $1.43 beat analysts' average estimate of $1.14.
Sales in Amazon Web Services' cloud business rose 19% to $27.4 billion, slightly below analyst estimates, according to StreetAccount. This represents an acceleration from 12% a year ago, but lags behind the growth rate of rival companies Microsoft and GoogleCloud revenues increased by 33% and 35%, respectively. The Microsoft Azure number includes other cloud services.
Amazon's capital expenditures rose 81% year over year to $22.62 billion, as the company continues to invest in data centers and equipment such as Nvidia Processors to run artificial intelligence products. Amazon has launched several AI products in its cloud and e-commerce businesses, and is also expected to announce a new version of its Alexa voice assistant powered by generative AI.
“Amazon has integrated AI into what is considered the most diversified technology footprint of any large cap, with multi-billion-dollar revenue streams in e-commerce, advertising, subscriptions, online video and the cloud,” analysts at Roth MKM wrote in a note afterward. Earnings report. They have a Buy rating on the stock.
The majority of the company's 2024 capital spending is to support the growing need for technology infrastructure, Amazon CFO Brian Olsavsky said on the earnings call.
CEO Andy Jassy said the company plans to spend about $75 billion on capital expenditures in 2024, and he suspects the company will spend more next year.
“The incremental bumps here are really driven by generative AI,” Jassy said on the call. “It is an extraordinarily large opportunity, perhaps once in a lifetime,” he said, noting that shareholders “will feel good about this long-term opportunity in which we are aggressively pursuing this.”
The ad was another bright spot. Sales at the unit expanded 19% to $14.3 billion during the quarter, meeting expectations and exceeding growth in Amazon's core retail business.
Amazon's advertising growth was roughly in line with deadwhich saw an 18.7% expansion, faster than growth at Google, which posted a 15% increase in ad revenue. popAmazon sales also jumped 15% from the previous year.
Amazon expects revenue in the current quarter to range between $181.5 billion and $188.5 billion, representing growth of 7% to 11% year over year. The midpoint of that range, $185 billion, was below analysts' average estimate of $186.2 billion, according to LSEG.
— CNBC's Ari Levy contributed to this report.