The company reported earnings of $15.3 billion, well above the industry analysts’ forecast of $12.21 billion as surveyed by FactSet. This marks an increase from $9.9 billion in the same quarter last year, with earnings per share at $1.43, also surpassing analyst estimates of $1.14.
Amazon noted an 11% growth in net sales compared to the third quarter of 2023, reflecting a robust performance as the company prepares for the holiday shopping season, one of the busiest times of the year for retailers.
“Our Prime Big Deal Days and the launch of a completely new Kindle lineup have performed significantly better than expected, and there is more to come,” said Andy Jassy, Amazon’s President and CEO, expressing enthusiasm about the company’s offerings as the holiday season approaches.
Looking ahead, Amazon anticipates fourth-quarter revenues to fall between $181.5 billion and $188.5 billion, slightly below analysts’ projections of $186.29 billion, which indicates cautious optimism as the company prepares for year-end sales.
The strong earnings report follows a previous quarter where Amazon fell short of revenue expectations. The company’s core online retail business generated $61.41 billion in revenue during Q3, including sales from the popular Prime Day shopping event held in July. While Amazon did not disclose specific revenue figures from this two-day sales event, it highlighted record sales and a higher volume of items sold compared to previous years.
Additionally, Amazon hosted another discount shopping event for Prime members earlier this month, a strategy initiated two years ago to enhance holiday shopping experiences. Sales from this event will be reflected in Amazon’s fourth-quarter earnings report.
The results come as tech giants like Microsoft, Meta, and Alphabet, Google’s parent company, release their own earnings reports this week.
Amazon Web Services (AWS), the company’s cloud computing division and a key driver of its artificial intelligence ambitions, reported a 19% increase in sales, totaling $27.5 billion. This growth coincides with Amazon’s increased investments in necessary infrastructure for data centers and AI technologies, further solidifying its position in the cloud computing market.
During a recent conversation with reporters, Amazon CFO Brian Olsavsky indicated that the company spent over $30 billion on capital expenditures in the first half of the year, primarily directed toward AWS infrastructure. Expectations for heightened investment in the second half of the year were also communicated.
Earlier this month, Amazon revealed it is investing in small nuclear reactors, seeking carbon-free energy sources in response to increasing demand for data centers and generative AI. Last month, Amazon also secured a multi-year deal with chipmaker Intel to develop custom AI chips for AWS, an initiative that enhances the unit’s production capabilities.
Year-over-year, Amazon’s capital expenditures rose significantly from $12.48 billion to $22.62 billion, reflecting investments in technology infrastructure, including data centers and NVIDIA GPUs used for AI applications.
In a earnings call Thursday afternoon, Jassy stated that Amazon is “broadly” utilizing generative AI across its businesses, including AI-powered shopping features in parts of Europe, Canada, and the United States. He also announced the launch of an AI shopping guide designed to assist consumers in product discovery, alongside an AI assistant aimed at enhancing productivity and providing tailored business insights.
Jassy emphasized the substantial opportunities presented by generative AI, noting that investment in data centers, networking gear, and hardware will be crucial for both AWS and AI initiatives. Many of these assets, such as data centers, could remain useful for decades.
“This is truly an unusually large opportunity, perhaps a once-in-a-lifetime chance,” he said, expressing confidence that customers, businesses, and shareholders would feel positive about the aggressive pursuit of long-term growth.
Amazon’s partnerships with AI startups, including Anthropic, are also under scrutiny by regulators, as the company leverages AWS and its custom chips for building, training, and deploying AI models. Recently, British competition authorities approved Amazon’s partnership with Anthropic, while the Federal Trade Commission in the U.S. has launched an antitrust lawsuit against Amazon, alleging the company is stifling competition on its e-commerce platform and charging excessive fees to sellers.
