Shares of Amazon (AMZN) are up 12% after the e-commerce giant reported strong financial results that showed accelerating growth in its cloud computing unit.
The Seattle-based company announced earnings per share (EPS) of $5.75 U.S. a share, which blew past consensus estimates of $1.82 U.S.
The profit was given a boost by Amazon’s investment in artificial intelligence (A.I.) startup Anthropic, which appreciated during the quarter.
Revenue in the April through June quarter totaled $200.61 billion U.S., which was ahead of the $196.47 billion U.S. forecast on Wall Street.
In other important metrics, Amazon Web Services, which houses the company’s cloud computing unit, revenue came in at $42.2 billion U.S. versus $40.54 billion U.S. expected.
Revenue in the cloud segment grew 37% year-over-year, surpassing Wall Street’s expectations for 31% growth.
Advertising revenue totaled $19.81 billion U.S., which topped the $19.43 billion U.S. that analysts had penciled in for Amazon.
Looking ahead, Amazon raised its capital expenditures for the year to $220 billion U.S., up from $200 billion U.S. previously, with most of that money going towards A.I. projects.
Amazon executives said rising prices for memory chips have pushed its capital expenditure estimates higher.
The increased A.I. spending has led Amazon’s free cash flow to turn negative.
The company’s free cash flow at quarter’s end was negative $7.6 billion U.S. versus positive $18.2 billion U.S. a year earlier.
Still, Amazon said that demand for it’s A.I. and cloud computing services is booming.
The company said that it currently has an Amazon Web Services backlog, which is contracted work that has not come online yet, of $496 billion U.S.
For the current third quarter of the year, Amazon guided for revenue of $197 billion U.S. to $202 billion U.S. Analysts were expecting $204.1 billion U.S. from the company.
Operating income in the third quarter is forecast to be in a range of $22.5 billion U.S. to $26.5 billion U.S., ahead of Wall Street forecasts of $24.92 billion U.S.
Prior to today (July 31), Amazon’s stock had been flat over the past 12 months (up 0.59%) and trading at $235.50 U.S. per share.
Tech Insider
