Amazon saw profits triple in the first quarter. Cloud services took off again, but e-commerce also grew 7%.
Ads and AI
CEO Andy Jassy is happy with a good start to the year, for all parts of the company. Amazon reported 10.4 billion dollars (9.7 billion euros) in profit on sales of 143.3 billion dollars (133.6 billion euros), sharply higher than the 3.2 billion dollars in profit and 127.4 billion dollars in sales a year earlier. It marks a turnaround for the technology giant, which had been facing economic and competitive pressures over the previous two years.
Its e-commerce business saw a 7% rise in sales. Consumers with Prime subscriptions are again using the service more frequently, to get as much value for their membership fees as possible. “While e-commerce is no longer the biggest growth driver, it remains a key part of Amazon’s flywheel, especially for boosting ad business,” said Emarketer’s Blake Droesch to AFP. Indeed, the ad business accounted for 11.8 billion dollars (11 billion euros) in revenue, representing 24% growth.
After a time of cost-cutting, companies are also investing heavily in their data centres again – to be ready for the AI revolution. Consequently, cloud branch AWS was the biggest grower, from 21.4 billion dollars a year ago to 25 billion dollars (23.3 billion euros) now. Artificial intelligence is creating considerable momentum, Jassy confirms, including at Amazon itself: in the US, the tech giant is testing an AI chatbot called Rufus that gives customers shopping tips, while generative AI features help sellers build their product listings.
