Market Commentary

Amazon Races Higher on Strong Results, Guidance

Abdul Rehman
6 Feb 2024 · 2 minutes read

Amazon (AMZN:US) shares rose as much as 9% on Thursday after the e-commerce and cloud giant reported much better-than-expected results for its second quarter.

The company posted a profit per share of $0.65 on revenue of $134.4 billion, crushing the consensus for earnings of $0.35 on sales of $131.6 billion. AWS – Amazon’s cloud segment – grew 12% to $22.14 billion, down from the 16% growth rate recorded in Q1.

“It was another strong quarter of progress for Amazon,” said Andy Jassy, Amazon CEO. “We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded.”

However, Amazon said it expects AWS growth to reaccelerate from Q3 onward. For the last quarter, the cloud business generated $22.1 billion in sales, topping the consensus of $21.7 billion.

The company generated $7.7 billion in operating profit for Q2, with about 70% of this figure coming from AWS. Amazon’s operating margin stood at 5.7%, easily ahead of the expected 3.5%.

For this quarter, the company guided for revenue in the range of $138 billion to 143 billion, suggesting growth of between 9% to 13% YoY. Operating income is expected at $7 billion

Amazon is seen as one of the biggest AI transformation beneficiaries given the importance of the cloud infrastructure. 

“Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases that make it much easier and more cost-effective for companies to train and run models.”

Several Congress members were trading AMZN stock in recent weeks. Most recently, Congressman Michael Burgess bought $15,000 - $50,000 worth of AMZN shares in early July.