Amazon’s sales boomed on strong demand in the second quarter for its wide range of products, from fast delivery for Prime deals to ads, fuelling a massive jump in profit from 2022. Sales grew 11% to $134.4 billion. That’s an increase from $121.2 billion in the second quarter of 2022. The number exceeded analyst predictions of $131.4 billion revenue.
The stock surged nearly 10% in after-hours trading. Amazon’s stock has risen 52% year to date, one of a handful of tech stocks that has helped power the market higher this year.
The company’s profit jumped sharply compared to this quarter in 2022. Its net income was $6.7 billion in the second quarter, compared to a net loss of $2 billion in second quarter of 2022. It soared past Refinitiv analyst predictions of $3.592 billion in earnings. Investors were closely watching customer spending in both the cloud and retail markets.
On the retail side, CEO Andy Jassy said in a statement that the company was able to save both time and cost on delivery.
In addition, Amazon Web Services has long been a cash cow for the company. During the first quarter of 2023 that segment’s sales rose 16% after a period of slowed growth as cloud users worried about the economy’s health. This quarter’s AWS sales increased 12%, a small slowdown.
In the statement, Jassy said “a slew of generative AI releases” has allowed its cloud business to remain a leader, competing with the likes of Google (GOOG) and Microsoft (MSFT). Jassy also added that AWS growth has “stabilized.”
Though a big bet on AI hasn’t translated into faster gains for AWS yet, the tech giant is optimistic about its future, experimenting with the e-commerce shopping experience as well. It’s working to use AI to sum up customer feedback about products on the site.
Jassy added there is continued “strong demand” for Amazon’s advertising services. Its ad business jumped 22% to $10.7 billion.
“We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded,” Jassy said in the statement.
Amazon said it expects its third-quarter sales to grow between 9% and 13% compared to the previous year’s quarter. To read the full results, visit the Amazon website.