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(Reuters) -Amazon.com beat fourth-quarter revenue expectations on Thursday on robust growth in its cloud business and online spending during the critical holiday shopping season, sending its shares up 5% after the market close.
The company forecast current-quarter revenue of $138 billion to $143.5 billion. Analysts polled by LSEG expect $142.13 billion.
Amazon (NASDAQ:AMZN) Web Services (AWS), the world’s largest cloud services provider, posted revenue of $24.2 billion in the fourth quarter, largely in line with analysts’ expectations of $24.26 billion.
AWS CEO Andy Jassy in a statement touted the unit’s “continued long-term focus on customers and feature delivery,” citing efforts to incorporate generative AI into many of its services. The new features “are starting to be reflected in our overall results,” he said.
Amazon shares have climbed over 6% this year and 41% in the past 12 months.
“Amazon was a clear winner in the 2023 holiday season, thanks to its commanding presence over an extended shopping period and a renewed emphasis on speedier delivery and essential categories prioritized by consumers,” said Insider Intelligence senior analyst Sky Canaves. He forecast Amazon expanding its U.S. ecommerce market share this year.
“The highly profitable ads business was lifted by demand from sellers on the fast-growing third-party marketplace,” Canaves said. “But all eyes will be on AWS, where the mild acceleration of growth … leaves some lingering doubts about whether the cloud unit will be able to hold its own against rivals.”
Earlier this week, Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) reported generous increases in their cloud revenue in the December quarter, beating Wall Street estimates, as customers lined up to test new AI features and build their own AI services.
But mounting costs of developing these cutting-edge features irked investors hoping for a big boost to sales from the new technology, sending their shares down.
Amazon’s fourth-quarter sales rose 14% to $170 billion, beating analysts’ average estimate of $166.21 billion according to LSEG data. Adjusted profit of $1 per share beat an average estimate of 80 cents per share.
