The world’s largest online retailer Amazon posted a profit of 6.7 billion dollars (6.1 billion euros). That was almost double what analysts were expecting. Amazon lost $2 billion in the same quarter last year. The stock rose 9 percent in after-hours trading.
The Corona years were like a roller coaster ride for Amazon. At the beginning of the pandemic, business grew explosively in times of lockdowns and closed shops. Accordingly, Amazon needed more people. But then people ordered less again, and Amazon responded, among other things downsizingto reduce costs. The logistics network was turned inside out for this purpose.
The past quarter now shows how much Amazon has been able to stabilize its core business of online trading, especially in its home market. The trading platform’s revenue in North America rose 11 percent to $74.4 billion. Operating profit reached $ 3.2 billion – after red numbers of $ 627 million in the same quarter last year. The international business was able to almost halve the operating loss with a minus of 895 million dollars.
At the AWS cloud division, a traditional moneymaker for the group, operating profit fell by six percent to $5.7 billion. AWS provides customers with computing power, software and storage space on the network – all things needed for artificial intelligence functions. Amazon wants to convince customers to use its cloud infrastructure for this. Already, AI and machine learning are a big part of AWS business. AWS revenue increased 12 percent last quarter to $22.1 billion.
So-called generative AI is at the center of the current hype surrounding artificial intelligence. Like the popular chatbot ChatGPT, it can create texts – or generate images from descriptions. The technology requires a particularly large amount of computing capacity. One wants to make AWS the long-term partner of customers in generative AI, said Amazon boss Andy Jassy. At the same time, “every single business area” at Amazon is working on its own applications with generative AI, he emphasized. Jassy hinted that the technology will also improve Amazon’s voice assistant Alexa.
Amazon – New annual high after strong numbers?
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Amazon’s consolidated sales rose 11 percent year-on-year to $134.4 billion. Operating profit jumped from $3.3 billion to $7.7 billion. Amazon’s figures exceeded analysts’ expectations. The forecasts for the current third quarter also exceeded market expectations. Amazon assumes group sales of between 138 and 143 billion dollars.
Jefferies raises Amazon price target
Analyst firm Jefferies has raised Amazon’s target price from $150 to $175 and left the rating on “buy”. The second quarter was strong in all areas, wrote analyst Brent Thill in a study available on Friday. The signals for the third quarter are also good. He raised his estimates. The topic of artificial intelligence (AI) is just beginning.
JPMorgan raises Amazon price target
The US bank JPMorgan has raised the price target for Amazon from 145 to 180 US dollars and left the rating at “Overweight”. Analyst Douglas Anmuth expects the shares to be revalued. He wrote this in a study available on Friday after the quarterly report. He attributes his optimism to AWS’ bottoming out, rising retail margins and strong cash flow.
LBBW raises Amazon price target
LBBW has upgraded Amazon from “hold” to “buy” after quarterly figures and raised the target price from $105 to $156. A robust cloud business and a successful “Prime Day” helped the group to achieve good sales growth in the second quarter, analyst Gerold Deppisch wrote in a study available on Friday. Additionally, additional savings would have driven operating profit and free cash flow. The outlook also surprises in a positive way: the reluctance to invest among AWS customers seems to be showing
to dissolve. Overall, Amazon got over the weak phase faster than expected. More positive surprises could follow.
Amazon shares are higher in premarket US trading on the NASDAQ, up 8.64 percent to $140.05.
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