In anticipation of sluggish demand in its key cloud business, Amazon has provided a cautious outlook. On Tuesday, the online retailer announced revenues of between $144 and $149 billion for the current quarter. Analysts on average had expected a good $150 billion. At the start of the year, however, revenues rose unexpectedly significantly to $143.3 billion. The increase of 17 percent by the cloud subsidiary Amazon Web Services (AWS) was also above market expectations. “The combination of modernizing corporate IT infrastructure and new AI capabilities has accelerated AWS growth,” said CEO Andy Jassy. Amazon shares rose by almost three percent in after-hours US trading.
However, its competitors Microsoft Azure and Google Cloud each increased their sales almost twice as much in the first quarter. They attracted customers with ever new products based on artificial intelligence (AI). But AWS is still a lot bigger, emphasized analyst Gil Luria from the research house DA Davidson. “We expect Amazon to catch up in AI capabilities in the coming years.” A few hours before the quarterly results were announced, AWS announced that “Amazon Q” was now generally available. The AI-supported assistant should, among other things, accelerate software development.
Amazon decided not to announce a dividend, which some stock market traders had hoped for. This makes the group stand out among the large technology companies, said Nicholas Colas, co-founder of the research house Datatrek. “Dividends are an expression of profitability. Since the rest of Big Tech has now decided to document this with a dividend, this leaves Amazon very isolated from the rest of the group.” However, the dividend yield of these companies is currently around 50 percent below the average of all stocks in the US S&P 500 index.