Amazon stock rises after earnings beat

Amazon ( AMZN ) reported first-quarter earnings that topped both the top and bottom of Wall Street estimates, sending the retailer's shares up 5% in after-hours trading.

Driven by a strong showing from its cloud computing division, Amazon continued a wave of big tech results that mostly impressed Wall Street, even as investors turned their attention to the conclusion of the Federal Reserve's May policy meeting on Wednesday.

The company said its industry-leading AWS business is on track to generate $100 billion in annual revenue.

Here are some of Amazon's most notable metrics for the company's fiscal first quarter, according to data from Bloomberg:

  • Net sales: $143.3 billion vs. $142.6 billion expected ($127.4 billion in Q1 2023)

  • Adjusted earnings per share: $0.98 vs. $0.83 expected ($0.31 in Q1 2023)

  • Amazon Web Services: $25 billion vs. $24.1 billion expected ($21.4 billion in Q1 2023)

  • Advertising: $11.8 billion vs. $11.8 billion expected ($9.5 billion in Q1 2023)

CFO Brian Olszewski said overall capex is expected to increase meaningfully this year, compared to roughly $50 billion in 2023, driven by higher infrastructure spending to support AWS's growth, including emerging AI.

The quarter's $14 billion capex is expected to rise for the foreseeable future, Olshavsky said. Amazon is seeing strong demand on the AWS side, with customers signing up for long contracts with large commitments, with many buildable AI components, he said.

Amazon's report came a week after its cloud and AI rival Microsoft ( MSFT ) posted an impressive quarter that beat expectations on the strength of its cloud computing business. The market cheered even louder for results from Google parent Alphabet ( GOOG , GOOGL ), which performed well on the top and bottom lines and came out with a new dividend announcement.

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Amazon, which has positioned itself on the AI ​​front, is another player competing to claim market share and launch new consumer services. In March, Amazon increased its investment in AI startup Anthropic, pouring in another $2.75 billion, bringing its investment total to $4 billion.

Like its rivals Microsoft and Alphabet, Amazon is using its strength in its cloud computing business to gain an edge in the nascent AI market. AI tools require large amounts of data and processing power to train and run large language models and their applications, relying on cloud providers to provide core infrastructure.

Amazon stock, which tied with the Dow Jones Industrial Average (^DJI) in February, is up about 20% for the year.

Hamza Shaban is a correspondent for Yahoo Finance, covering markets and economics. Follow Hamza on Twitter @hshaban.

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