By Deborah Mary Sophia and Greg Bensinger<\/p>\n
April 29 (Reuters) – Amazon.com on Wednesday reported cloud sales growth above Wall Street expectations, driven by strong enterprise spending as companies continue to devote tremendous resources to their artificial intelligence efforts.<\/p>\n
Still, shares dipped about 3.7% in \u200cextended trading after it projected current-quarter operating income between $20 billion and $24 billion, a slightly wider downside range from the current midpoint estimate \u200cof $22.62 billion, and after sales growth in rival Alphabet’s cloud division outpaced the Seattle company.<\/p>\n
Revenue at Amazon Web Services (AWS) jumped 28% to $37.6 billion in the first quarter, compared with analysts’ average \u200bestimate of a 25.1% increase to $36.6 billion, according to LSEG. Net sales overall grew to $181.5 billion.<\/p>\n
Amazon – the world’s largest cloud services provider – has boosted investor confidence by deepening its partnership with the two biggest AI firms, OpenAI and Anthropic, within days of each other. The firm is working overtime to reassure investors that its AI infrastructure spending will generate returns in the near term.<\/p>\n
“The significant reacceleration in AWS sales growth is the standout story,” said Jesse Cohen, senior analyst at \u200cInvesting.com, adding that Amazon customers “are fully embracing new workloads, \u2060especially in AI.”<\/p>\n
However, Alphabet’s shares were up 6% in post-market action, after it said its Google Cloud division’s sales grew 63% to $20 billion in the first quarter, exceeding estimates for a 50% rise. Gil Luria, a D.A. Davidson analyst, noted that \u2060for AWS, “the much better growth rate at Google Cloud may be a slight disappointment.”<\/p>\n
For the period ended March 31, Amazon’s capital expenditures were $44.20 billion, up more than 76% from the year-earlier period, and above analysts’ estimate of $41.40 billion. In February, Amazon projected about $200 billion in such spending for the year, an initial shock to investors.<\/p>\n
The \u200broughly $600 \u200bbillion that Big Tech is expected to pour into AI this year – a historic \u200boutlay that has dented cash flows at these companies – is \u200ctesting investors’ patience, even as companies say that it is necessary to increase computing capacity as strong AI demand outstrips supply.<\/p>\n
CEO Andy Jassy said in his shareholder letter this month that much of the company’s 2026 spending will be monetized over 2027 and 2028.<\/p>\n
BIG CLOUD PARTNERSHIPS<\/p>\n
On Tuesday, Amazon made available all of OpenAI’s latest models and its coding agent, Codex, on AWS, taking advantage of loosened ties between the ChatGPT maker and cloud rival Microsoft.<\/p>\n
Last week, Amazon struck a deal to invest up to $25 billion in Anthropic, while the Claude creator committed to spending more than $100 billion on AWS in the next 10 \u200cyears.<\/p>\n
The announcements, coupled with a disclosure earlier this month that AI services at AWS \u200bwere generating more than $15 billion in annualized revenue, have helped push Amazon’s stock up some \u200b14% so far this year, putting it among the best performers \u200bin the “Magnificent 7” group of tech mega-caps.<\/p>\n
Amazon forecast current-quarter revenue between $194 billion and $199 billion, compared with the analysts’ average estimate \u200cof $188.9 billion, according to LSEG. That factors in a slight \u200bnegative effect from unfavorable foreign exchange rates.<\/p>\n
At \u200bits retail business, Amazon has been investing in expanding same-day delivery to more towns and small cities, and has sharpened its focus on grocery delivery to better compete with supermarket chains such as Walmart and Kroger.<\/p>\n
Ad sales, an area of huge growth for Amazon, jumped 24% \u200byear-over-year to $17.2 billion. The company has been putting ads \u200cjust about anywhere it can, including in grocery shopping carts and Prime Video content.<\/p>\n
Amazon has been trimming corporate jobs, including 16,000 \u200bin January, across a broad swath of roles. However, its total workforce was down only 1,000 from the end of last \u200byear.<\/p>\n
(Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila and David Gaffen)<\/p>\n","protected":false},"excerpt":{"rendered":"By Deborah Mary Sophia and Greg Bensinger April 29 (Reuters) – Amazon.com on Wednesday reported cloud sales growth…\n","protected":false},"author":2,"featured_media":22158,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[6744,1395,3013,13913],"class_list":{"0":"post-22157","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-agi","8":"tag-agi","9":"tag-amazon-web-services","10":"tag-artificial-general-intelligence","11":"tag-sales-growth"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/22157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=22157"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/22157\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/22158"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=22157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=22157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=22157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}