Amazon expects a booming Christmas business this year. On Thursday (local time) the online retailer announced sales of between 160 and 167 billion dollars for the current fourth quarter. In the same period last year, revenue was $149.2 billion. Analysts had expected $166.62 billion, the upper end of the range.
Thanks, among other things, to the growing cloud business and marketing events, revenue grew by 13 percent to $143.1 billion. This put the group above market estimates of $141.4 billion. Net profit climbed to $9.9 billion after the bottom line was $2.87 billion in the same period last year. The cloud customers of the Amazon subsidiary AWS brought the company sales of $23.1 billion. That’s slightly more than the $23.09 billion that analysts had estimated.
Amazon also benefited from promotional days such as Prime Day, which boosted sales significantly. In addition to its cloud business, the company primarily focuses on retail and faster deliveries. Day-of-order deliveries improve margins by encouraging customers to make more frequent and larger purchases. “The retail sector is coming back to life, particularly in North America,” said analyst Sophie Lund-Yates of British investment firm Hargreaves Lansdown.
In the previous quarter, the AI boom gave a boost to the AWS cloud division. Because online trading was also going well at the same time, Amazon presented a surprisingly strong interim report. AI programs like ChatGPT require specialized high-performance computers. Therefore, the need for data centers is increasing. According to a study by real estate agent Jones Lang LaSalle (JLL), the installed computing power of all operators at the European nodes alone doubled to 114 megawatts in the second quarter – a record.
At the same time, the group has to defend itself in numerous antitrust proceedings. In the USA, plaintiffs accuse him of, among other things, price gouging. If convicted, the company could face billions in damages or even be broken up. In Great Britain, authorities are taking a closer look at the cloud sector.
Regardless, stricter European competition rules have been in effect for Amazon and other large technology companies for several weeks. If provisions of the Digital Markets Act (DMA) are ignored, the European Union can impose penalties of up to ten percent of annual turnover. The company’s shares rose by up to five percent in the after-hours US business and then fell slightly to around 0.3 percent.