Amazon.com beat fourth-quarter revenue expectations on Thursday as new generative AI features in its cloud and ecommerce businesses spurred robust growth during the critical holiday period, sending its shares up eight per cent after the market close.
The company forecast current-quarter revenue of $138 billion to $143.5 billion. Analysts polled by LSEG expect $142.13 billion.
Amazon Web Services (AWS), the world’s largest cloud services provider, posted revenue of $24.2 billion in the fourth quarter, largely in line with analysts’ expectations of $24.26 billion.
AWS CEO Andy Jassy in a statement touted the unit’s “continued long-term focus on customers and feature delivery,” citing efforts to incorporate generative AI into many of its services. The new features “are starting to be reflected in our overall results,” he said.
Amazon’s roster of high-spending business customers have provided it stable growth in an uncertain economy, but its position as the world’s biggest cloud provider is being challenged by Microsoft and Alphabet .
To bolster its cloud business and in response to Microsoft’s promised $10 billion investment in ChatGPT parent OpenAI, Amazon is spending up to $4 billion in chatbot-maker Anthropic.
Earlier this week, Microsoft and Alphabet reported generous cloud revenue gains in the December quarter, beating Wall Street estimates, as customers lined up to test new AI features and build their own AI services.
But mounting costs of developing these cutting-edge features irked investors hoping for a big sales boost from the new technology, sending their shares down.
“All eyes will be on AWS, where the mild acceleration of growth … leaves some lingering doubts about whether the cloud unit will be able to hold
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