Amazon profit soars due to AI and advertising
Revenue at Amazon Web Services has soared by more than 200% and the company says artificial intelligence (AI) and advertising sales have driven its better-than-expected earnings.
The retail giant published an earnings report for the first quarter of 2024 on Tuesday (April 30) and the figures exceeded what was expected by Wall Street.
An overall revenue of $143.3bn has been reported for the first three months of the year which is a 13% increase from last year. Amazon was expected to reach $142.65bn.
Operating income saw a huge boost of more than 200%, bringing this to $15.3 billion. This comes after the company has heavily focused on cost-cutting measures and being as efficient as possible to improve its bottom line.
Operating cash flow increased by 82% to $99.1 billion for the trailing twelve months, compared with $54.3 billion for the trailing twelve months that ended March 31, 2023.
In a statement within the report, the president and CEO Andy Jassy says how the “combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities” has accelerated Amazon Web Services.
He goes on to say how “advertising efforts continue to benefit from the growth of our Stores and Prime Video businesses. It’s very early days in all of our businesses and we remain excited by how much more we can make customers’ lives better and easier moving forward.”
Amazon hones in on AI
One of the focuses for the giant has been in generative AI and they’ve delivered a number of innovations in Amazon Bedrock which is the AI service that allows customers to use an existing large language model and customize it with their own data.
AWS and NVIDIA have also announced an extension of the strategic collaboration during this financial reporting period, with the aim being to “help customers unlock new generative AI capabilities.”
The AI-powered shopping assistant Rufus has continued to be rolled out in the last few months too. Rufus is in beta and will help people make more informed purchase decisions by answering a number of shopping-related questions, providing product comparisons, and making recommendations.
Independent sellers based in the U.S. have seen the introduction of AI features too as tools have been included to speed up the product listing process and make them as engaging as possible.
Featured Image: Photo by Andrew Stickelman on Unsplash
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