LOS ANGELES (AP) 鈥� reported a boost in its quarterly profits Thursday and exceeded revenue estimates, sending the company's stock up in after-hours trading.
For the three months that ended on Sept. 30, the Seattle-based tech giant posted a revenue of $158.9 billion, higher than the $157.28 billion analysts had expected.
Amazon said it earned $15.3 billion, higher than the $12.21 billion industry analysts surveyed by FactSet had anticipated. Amazon earned $9.9 billion during the same period last year. Earnings per share were $1.43, higher than analysts鈥� expectations of $1.14.
Net sales increased 11% compared with the third quarter of 2023, Amazon said.
Thursday鈥檚 report offers a last look at Amazon鈥檚 business before the start of the holiday shopping season, the busiest time of year for the retail industry.
鈥淎s we get into the holiday season, we鈥檙e excited about what we have in store for customers,鈥� said Andy Jassy, Amazon's president and CEO. 鈥淲e kicked off the holiday season with our biggest-ever Prime Big Deal Days and the launch of an all-new Kindle lineup that is significantly outperforming our expectations; and there鈥檚 so much more coming."
The company said it expects revenue for the fourth quarter to be between $181.5 billion and $188.5 billion, compared with the $186.29 billion forecast by analysts.
The better-than-expected earnings come after Amazon missed revenue estimates last quarter,.
Amazon reported its core online retail business pulled in $61.41 billion in revenue this in the third quarter. Those figures include sales from the company鈥檚 popular Prime Day shopping event held in July. Though Amazon does not disclose how much revenue comes from the 48-hour shopping bonanza, it said this year鈥檚 event resulted in record sales and more items sold than ever before.
The e-commerce company held another discount shopping event for Prime members earlier this month, a strategy it rolled out two years ago in order to ahead of the holiday shopping season. Sales for that event will be included in Amazon鈥檚 fourth quarter earnings report.
The company鈥檚 results follow other earning reports this week from tech giants such as Microsoft, Meta and Google鈥檚 corporate parent, Alphabet.
Amazon Web Service, the company鈥檚 cloud computing unit and a main driver of its artificial intelligence ambitions, reported a 19% increase in sales to $27.5 billion. The boost in sales comes as the company, like others of its caliber, is ramping up investments in data centers, AI chips and other infrastructure needed to support the technology.
During a call with reporters in August, Amazon鈥檚 Chief Financial Officer Brian Olsavsky noted the company had spent more than $30 billion during the first half of the year on capital expenditures and that the majority was spent on AWS infrastructure. Those investments, he said, were expected to increase during the second half of the year.
Just this month, Amazon said it was investing in small nuclear reactors, following a similar announcement by Google, as both tech giants seek new sources of carbon-free electricity to meet the surging demand from data centers and generative AI. Meanwhile, last month, the company inked a multi-year deal with the chipmaker Intel, which will create some custom AI chips for AWS, adding to those the unit already produces on its own.
Amazon鈥檚 capital expenditures jumped year-over-year from $12.48 billion to $22.62 billion, driven in large part by its investment in technological infrastructure, such as data centers and Nvidia GPUs used for AI.
During an earnings call Thursday afternoon, Jassy said Amazon is using generative AI 鈥減ervasively鈥� across its businesses, including AI-powered shopping in parts of Europe, Canada and the United States. Amazon also recently debuted AI shopping guides for consumers, which help customers to find products, he said, as well as an AI assistant that 鈥渙ffers tailored business insights to boost productivity and drive seller growth.鈥�
鈥淭he increase bumps here are really driven by generative AI,鈥� he said on the call.
Jassy told investors that both AWS and AI require the company to invest in data centers, networking gear and hardware upfront. A lot of those assets 鈥� such as data centers, he said 鈥� can be useful for decades.
鈥淚t is a really unusually large, maybe once in a lifetime type of opportunity,鈥� he said, 鈥渁nd I think our customers, the business and our shareholders, will feel good about this long-term, that we鈥檙e aggressively pursuing it.鈥�
Regulators have been scrutinizing Amazon鈥檚 other partnership with the AI startup Anthropic, which is using AWS as its primary cloud provider and the company鈥檚 custom chips to build, train and deploy its AI models. Amazon got some good news in September when British competition authorities cleared its partnership with Anthropic.
The relationship and others like it, however, continue to face scrutiny in the U.S. by the Federal Trade Commission. Headed by Big Tech critic Lina Khan, the FTC has brought an antitrust lawsuit against Amazon, alleging the company is stifling competition and overcharging sellers on its e-commerce platform.
Sarah Parvini, The Associated Press
