- Amazon (NDAQ:AMZN) impressed investors with its Q1 2024 performance, as the tech giant beat Wall Street estimates
- Bolstered by a robust showing from its cloud computing segment, Amazon’s earnings report continues a trend of impressive results from big tech companies
- Q1 2024 net revenues rose to US$143.3 billion, marking a notable increase from US$127.4 billion in the same period last year
- Amazon Inc. last traded at US$ 175.00 per share
Amazon (NDAQ:AMZN) impressed investors with its Q1 2024 performance as the tech giant beat Wall Street estimates.
Bolstered by a robust showing from its cloud computing segment, Amazon’s earnings report continues a trend of impressive results from big tech companies.
In figures released by the Seattle-based retail behemoth, Q1 2024 net revenues rose to US$143.3 billion, marking a notable increase from US$127.4 billion in the same period last year. This figure slightly exceeded the consensus expectation of analysts tracked by FactSet, signaling Amazon’s resilience and adaptability in a dynamic market landscape. However, this comes in under its Q4 2023 net sales of US$170 billion.
A standout contributor to Amazon’s strong financial performance was its Amazon Web Services (AWS) cloud-computing business, which saw net revenue grow by an impressive 17 per cent year-over-year to reach US$25 billion. This growth underscores the increasing reliance on cloud infrastructure and services, particularly in an era where remote work and digital transformation have become the norm.
Its core segments also demonstrated healthy growth, with sales from the North America division rising by 12 per cent to US$86.3 billion and the International division climbing by 10 per cent to $31.9 billion. These figures highlight the company’s ability to capitalize on diverse revenue streams and effectively penetrate global markets.
Amazon reported a substantial increase in net income for the first three months of the year, reaching US$10.4 billion, or 98 cents per share, compared with US$3.2 billion, or 31 cents per share, in the corresponding period last year. This impressive growth in profitability underscores Amazon’s efficiency in managing costs and driving operational excellence.
Operating income also experienced growth, rising 221 per cent to US$15.3 billion, with an operating margin of 10.7 per cent, up from 3.7 per cent in the previous year. This improvement reflects Amazon’s strategic focus on enhancing operational efficiency and maximizing profitability across its business segments.
“It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results,” Amazon’s president and CEO, Andy Jassy, said in a news release. “The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate (now at a US$100 billion annual revenue run rate); our Stores business continues to expand selection, provide everyday low prices, and accelerate delivery speed (setting another record on speed for Prime customers in Q1) while lowering our cost to serve; and, our Advertising efforts continue to benefit from the growth of our Stores and Prime Video businesses. It’s very early days in all of our businesses and we remain excited by how much more we can make customers’ lives better and easier moving forward.”
Looking ahead, Amazon provided optimistic guidance for Q2 2024, with expectations of net revenue ranging between US$140 billion and US$149 billion. This forecast represents a year-over-year growth of 7 per cent to 11 per cent, signalling the company’s confidence in sustaining its momentum and capitalizing on continued market opportunities.
In the broader context of the tech industry, Amazon, along with competitors Microsoft and Alphabet, is leveraging its dominance in the cloud computing sector to gain a competitive edge in the burgeoning artificial intelligence market. As AI tools increasingly rely on vast amounts of data and processing power, cloud providers play a crucial role in supplying the necessary infrastructure to support AI development and deployment.
For more on the company, visit how to buy Amazon stock.
Amazon stock (NDAQ:AMZN) closed 3.29 per cent lower on Tuesday at US$175, but earlier in the day moved just a few dollars from its all-time high of US$189.77 reached earlier this month.
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