Amazon crosses Wall Street's estimates, posts $134 bn revenue in Q2

Online sales lift earnings; shares surge about 11% in early trade

Amazon.com Inc on Thursday reported sales growth and profit ahead of Wall Street's expectations, as the company delivered goods faster and cheaper to shoppers and as recent cloud-computing headwinds began to subside.

Shares of Amazon rose about 11 per cent in early trade.

Facing an array of challenges, Amazon has aimed to keep its mantle as the world's biggest cloud provider and online retailer.

The company answered AI front-runners Google and Microsoft with rival services of its own, drawing thousands of customers and touting the breadth of technology it has an offer, similar to what's powering the human-like chatbot ChatGPT. In retail, Amazon reorganized its delivery network and opened warehouses for same-day shipping closer to big metro areas, saving time and costs on delivery.

But the boost that Amazon's cloud could reap from powering businesses’ AI demand has yet to materialise in full, while those same customers had whittled down spending wherever they could. Consumers for months have acted with similar reserve, putting off discretionary purchases and shopping for value.

Despite this, Amazon sped up revenue growth in the second quarter. Sales increased 11 per cent to $134.4 billion, compared to estimates of $131.50 billion from analysts polled by Refinitiv.

The company’s fortunes in particular have been tied to those of its cloud-computing division. Long a major source of profit, Amazon Web Services (AWS) has seen growth slowdown in recent quarters, turbulence that CEO Andy Jassy said was starting to fade.

“Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment,” he said in a statement. “It was another strong quarter of progress for Amazon.”

AWS beat estimates of around $21.7 billion in second-quarter cloud sales, increasing them 12 per cent to $22.1 billion.

Amazon has aimed to operate more leanly in the meanwhile, with 27,000 people affected by layoffs or what had been 9 per cent of its roughly 300,000-person staff. It recently revealed more role reductions at Amazon Fresh stores after months of searching for a better grocery strategy.