Amazon Reports Boost in Quarterly Profits, Exceeds Revenue Estimates as it Invests in AI

Amazon has reported a significant increase in quarterly profits, surpassing revenue expectations, as the company continues to invest heavily in artificial intelligence (AI) technologies.

In its third-quarter earnings report, Amazon announced net sales of $158.9 billion, an 11% increase compared to the same period last year, exceeding analysts’ estimates of $157.3 billion. Net income rose to $15.3 billion, or $1.43 per diluted share, up from $9.9 billion, or $0.94 per diluted share, in the third quarter of 2023. Amazon Advertising

The company’s cloud computing division, Amazon Web Services (AWS), experienced a 19% year-over-year increase in sales, reaching $27.5 billion. This growth is attributed to substantial investments in data centers and AI infrastructure, positioning AWS as a leader in the cloud services market. AP News

Amazon’s advertising revenue also saw a 19% rise, totaling $14.3 billion for the quarter. The North America segment reported sales of $95.5 billion, a 9% increase from the previous year, while international sales grew by 12% to $35.9 billion. The Times

CEO Andy Jassy emphasized the company’s commitment to AI, describing it as a “once-in-a-lifetime type of opportunity.” He noted that Amazon plans to spend over $75 billion in 2025, with a significant portion allocated to AWS and AI initiatives. Business Insider

Despite the increased spending, Amazon’s operating income rose to $17.4 billion, surpassing analysts’ expectations of $14.75 billion. The company’s operating margin improved to 11% from 7.8% in the same quarter last year. Business Insider

Looking ahead, Amazon forecasts fourth-quarter net sales between $181.5 billion and $188.5 billion, aligning with the holiday shopping season. The company also projects operating income between $16.0 billion and $20.0 billion for the upcoming quarter. Amazon Advertising

These results underscore Amazon’s strategic focus on AI and cloud computing as key drivers of future growth, while maintaining strong performance across its retail and advertising segments.