Amazon shares rise after third-quarter profit beats forecast | Wilnesh News

Amazon The company’s shares rose 6% on Friday after it reported better-than-expected earnings, driven by growth in its cloud computing and advertising businesses.

The stock is up about 32% this year. On Friday, the stock briefly hit $200.50, near an all-time high. Its highest closing price was $200, a level the stock hit twice in July. The stock closed Friday at $197.93.

Revenue for the quarter rose 11% to $158.9 billion, exceeding the $157.2 billion expected by analysts surveyed by LSEG. Profit of $1.43 was higher than analysts’ average estimate of $1.14.

Sales of Amazon’s Web Services cloud business grew 19% to $27.4 billion, slightly lower than analysts’ expectations, according to StreetAccount. That’s up from 12% a year ago but lags rivals’ growth rates Microsoft and Googleof which cloud revenue grew by 33% and 35% respectively. Microsoft’s Azure numbers also include other cloud services.

Amazon’s capital expenditures soared 81% from the same period last year to $22.62 billion as the company continued to invest in data centers and equipment such as NVIDIA Processors that power artificial intelligence products. Amazon has launched a variety of artificial intelligence products in its cloud and e-commerce businesses, and is also expected to launch a new version of its Alexa voice assistant powered by generative artificial intelligence.

Analysts at Roth MKM wrote in a note after the conference: “Amazon has integrated artificial intelligence into the most diverse technology areas of any large enterprise, with strong positions in e-commerce, advertising, subscriptions, online movies and the cloud. Billions of dollars in revenue. They rate the stock a buy.

Amazon Chief Financial Officer Brian Olsavsky said on an earnings call that the majority of the company’s capital expenditures in 2024 will be used to support growing demand for technology infrastructure.

Chief Executive Andy Jassy said the company plans to spend about $75 billion in capital expenditures in 2024, and he suspects it will spend more next year.

“The added barriers here are really driven by generative artificial intelligence,” Jassy said on the call. “This is really a very large opportunity, maybe a once-in-a-lifetime opportunity,” he said. He noted that shareholders “will We are pleased with the long-term goals we are pursuing aggressively.”

Advertising is another highlight. Sales in the unit rose 19% in the quarter to $14.3 billion, in line with expectations and outpacing growth in Amazon’s core retail business.

Amazon’s Advertising Growth and Yuangrew by 18.7%, faster than Google, whose advertising revenue grew by 15%. breakSales also increased by 15% compared with the same period last year.

Amazon expects revenue this quarter to be between $181.5 billion and $188.5 billion, an annual increase of 7% to 11%. The midpoint of that range was $185 billion, below analysts’ average estimate of $186.2 billion, according to LSEG.

—CNBC’s Ari Levy contributed to this report.