Amazon reported a 35 percent jump in quarterly profits Thursday as the e-commerce giant said major investments in artificial intelligence began paying off.<\/p>\n
But the Seattle-based company’s profit outlook for the current quarter came in lower than hoped for, with investors worried that the cost of AI was weiging on the bottom line.<\/p>\n
Amazon’s share price was trading about six percent lower in after hours trading.<\/p>\n
This was despite a stellar second quarter that exceeded analyst expecations, much like it did for its AI focused rivals Google, Microsoft and Meta, which posted bumper results for the period.<\/p>\n
“Our conviction that AI will change every customer experience is starting to play out,” said Chief Executive Andy Jassy, pointing to the company’s expanded Alexa+ service and new AI shopping agents.<\/p>\n
Amazon posted net profit of $18.2 billion for the second quarter that ended June 30, compared with $13.5 billion in the same period last year.<\/p>\n
Net sales climbed 13 percent to $167.7 billion, beating analyst expectations and signaling that the company was surviving the impacts of the high-tariff trade policy under US President Donald Trump.<\/p>\n
“There continues to be a lot of noise about the impact that tariffs will have on retail prices and consumption. Much of it thus far has been wrong and misreported,” Jassy told analysts.<\/p>\n
– ‘Curveballs’ –<\/p>\n
Amazon Web Services (AWS), the company’s world leading cloud computing division, led the charge with sales jumping 17.5 percent to $30.9 billion.<\/p>\n
The unit’s operating profit rose to $10.2 billion from $9.3 billion a year earlier.<\/p>\n
The strong AWS performance reflects surging demand for cloud infrastructure to power AI applications, a trend that has benefited major cloud providers as companies race to adopt generative AI technologies.<\/p>\n
But investors seemed worried about Amazon’s big cash outlays to pursue its AI ambitions, sending its share price more than three percent lower in after-hours trading.<\/p>\n
The company’s free cash flow declined sharply to $18.2 billion, down from $53 billion in the same period last year, as Amazon ramped up capital spending on AI infrastructure and logistics.<\/p>\n
The company spent $32.2 billion on property and equipment in the quarter, nearly double the $17.6 billion spent a year earlier, reflecting massive investments in data centers and backroom capabilities.<\/p>\n
Amazon has pledged to spend up to $100 billion this year, largely on AI-related investments for AWS.<\/p>\n
For the current quarter, Amazon forecast net sales between $174.0 billion and $179.5 billion, representing solid growth of 10-13 percent compared with the third quarter of 2024.<\/p>\n
But operating profit was forecast in a wide range from $15.5 billion to $20.5 billion in the current third quarter, which was more cautious than some had hoped for.<\/p>\n
The caution indicates that “there\u2019s still potential for curveballs from ongoing trade negotiations and accelerating competition on the AI front,” said Emarketer analyst Sky Canaves.<\/p>\n
arp\/dw<\/p>\n
\u00a9 Agence France-Presse<\/p>\n","protected":false},"excerpt":{"rendered":"
Amazon reported a 35 percent jump in quarterly profits Thursday as the e-commerce giant said major investments in artificial intelligence began paying off. But the Seattle-based company’s profit outlook for the current quarter came in lower than hoped for, with investors worried that the cost of AI was weiging on the bottom line. Amazon’s share […]<\/p>\n","protected":false},"author":3,"featured_media":5003,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sitemap_exclude":false,"_sitemap_priority":"","_sitemap_frequency":"","jnews-multi-image_gallery":[],"jnews_single_post":{"subtitle":""},"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"jnews_post_split":[],"footnotes":""},"categories":[196],"tags":[214,316,210,517,144],"class_list":["post-5002","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-economy","tag-ai","tag-earnings","tag-retail","tag-tech","tag-us-en"],"_links":{"self":[{"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/posts\/5002","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/comments?post=5002"}],"version-history":[{"count":0,"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/posts\/5002\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/media\/5003"}],"wp:attachment":[{"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/media?parent=5002"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/categories?post=5002"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.iq\/en\/wp-json\/wp\/v2\/tags?post=5002"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}