Amazon reports boost in quarterly profits, exceeds turnover estimates as it invests in AI

LOS ANGELES — LOS ANGELES (AP) — Amazon reported a boost in its quarterly profits Thursday and exceeded turnover estimates, sending the business’s distribute up in after-hours market activity.

For the three months that ended on Sept. 30, the Seattle-based tech giant posted a turnover of $158.9 billion, higher than the $157.28 billion analysts had expected.

Amazon said it earned $15.3 billion, higher than the $12.21 billion industry analysts surveyed by FactSet had anticipated. Amazon earned $9.9 billion during the same period last year. returns per distribute were $1.43, higher than analysts’ expectations of $1.14.

Net sales increased 11% compared with the third quarter of 2023, Amazon said.

Thursday’s update offers a last look at Amazon’s business before the commence of the holiday shopping period, the busiest period of year for the retail industry.

“As we get into the holiday period, we’re enthusiastic about what we have in store for customers,” said Andy Jassy, Amazon’s president and CEO. “We kicked off the holiday period with our biggest-ever Prime large Deal Days and the launch of an all-recent Kindle lineup that is significantly outperforming our expectations; and there’s so much more coming.”

The business said it expects turnover for the fourth quarter to be between $181.5 billion and $188.5 billion, compared with the $186.29 billion approximate by analysts.

The better-than-expected returns arrive after Amazon missed turnover estimates last quarter,.

Amazon reported its core online retail business pulled in $61.41 billion in turnover this in the third quarter. Those figures include sales from the business’s popular Prime Day shopping occurrence held in July. Though Amazon does not disclose how much turnover comes from the 48-hour shopping bonanza, it said this year’s occurrence resulted in record sales and more items sold than ever before.

The e-commerce business held another discount shopping occurrence for Prime members earlier this month, a schedule it rolled out two years ago in order to ahead of the holiday shopping period. Sales for that occurrence will be included in Amazon’s fourth quarter returns update.

The business’s results pursue other earning reports this week from tech giants such as Microsoft, Meta and Google’s corporate parent, Alphabet.

Amazon Web Service, the business’s cloud computing unit and a main driver of its artificial intelligence ambitions, reported a 19% boost in sales to $27.5 billion. The boost in sales comes as the business, like others of its caliber, is ramping up investments in data centers, AI chips and other infrastructure needed to back the technology.

During a call with reporters in August, Amazon’s Chief monetary Officer Brian Olsavsky noted the business had spent more than $30 billion during the first half of the year on pool expenditures and that the majority was spent on AWS infrastructure. Those investments, he said, were expected to boost during the second half of the year.

Just this month, Amazon said it was investing in tiny nuclear reactors, following a similar announcement by Google, as both tech giants seek recent sources of carbon-free electricity to meet the surging demand from data centers and generative AI. Meanwhile, last month, the business inked a multi-year deal with the chipmaker Intel, which will make some custom AI chips for AWS, adding to those the unit already produces on its own.

Amazon’s pool expenditures jumped year-over-year from $12.48 billion to $22.62 billion, driven in large part by its pool in technological infrastructure, such as data centers and Nvidia GPUs used for AI.

During an returns call Thursday afternoon, Jassy said Amazon is using generative AI “pervasively” across its businesses, including AI-powered shopping in parts of Europe, Canada and the United States. Amazon also recently debuted AI shopping guides for consumers, which assist customers to discover products, he said, as well as an AI assistant that “offers tailored business insights to boost productivity and drive seller growth.”

“The boost bumps here are really driven by generative AI,” he said on the call.

Jassy told investors that both AWS and AI require the business to invest in data centers, networking gear and hardware upfront. A lot of those assets — such as data centers, he said — can be useful for decades.

“It is a really unusually large, maybe once in a lifetime type of chance,” he said, “and I ponder our customers, the business and our shareholders, will feel excellent about this long-term, that we’re aggressively pursuing it.”

Regulators have been scrutinizing Amazon’s other collaboration with the AI recent business Anthropic, which is using AWS as its primary cloud provider and the business’s custom chips to construct, train and deploy its AI models. Amazon got some excellent information in September when British competition authorities cleared its collaboration with Anthropic.

The connection and others like it, however, continue to face scrutiny in the U.S. by the Federal Trade percentage. Headed by large Tech critic Lina Khan, the FTC has brought an antitrust lawsuit against Amazon, alleging the business is stifling competition and overcharging sellers on its e-commerce platform.