E-commerce giant Amazon Inc. shares gained over 6 per cent on Friday, November 1, after the company posted stronger-than-expected earnings in its third-quarter results.
Amazon.com Inc. shares rose 6.30 per cent to $198.12 per share as of 1:50 p.m. (EDT) on Friday, compared to $186.40 at its previous close on Thursday.
The company's revenues rose 11 per cent to $158.9 billion for the quarter ending September 30, compared year-on-year. Net profits were up to $15.3 billion, reported the news agency AFP.
Amazon Web Services (AWS), the cloud computing division, continued its solid performance with an increase in sales of 19 per cent compared year-on-year to $27.5 billion, as per the report.
The strong cloud performance comes during increasing competition for AI-related services from Microsoft and Google. Like its competitors, WS has invested heavily in artificial intelligence, building out data centers and the computing capacity that is required to deliver AI to cloud customers, as per the report.
Amazon's international segment reported an operating profit of $1.3 billion, compared to a small loss in the same quarter last year. The North American operations showed improvement with the operating profits rising to $5.7 billion, compared year-on-year with $4.3 billion, reported the agency.
The company also recorded a 19 per cent increase in advertising sales as the business takes on more share of revenue on the platform, as per the report.
“As we get into the holiday season, we're excited about what we have in store for customers,” said Andy Jassy, chief executive officer of Amazon highlighting the success of Prime Big Deal Days and noted strong performance from the new Kindle Lineup, as per the agency report.
Amazon's expansion plans regarding its Amazon Pharmacy Same-Day Delivery service to nearly half the US, signalling a continued focus on healthcare services despite some doubts by investors in the sector, as per the report.
The company increased its revenue outlook by 7 per cent to 11 per cent, between $181.5 billion and $188.5 billion for the coming quarter, compared to the same period the previous year, as per the report.
“Amazon continues to be the primary beneficiary of the US consumer's shift to online shopping and a healthy Prime Day helped boost revenues for the retail and ad businesses,” Sky Canaves, principal analyst at Emarketer told the agency.
“The bind for investors is that Amazon has had to increase AI-related spending for AWS to keep up with demand and defend its market share,” said Canaves as per the report.
But the giant is in “a relatively good position since it has been steadily building (cloud) capacity and faces fewer constraints” than its rivals. The rosy results came a day after Microsoft and Meta failed to impress investors, sending their shares sharply lower even though earnings beat expectations, as per the report.
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