Amazon reported healthy consumer sales and a strong performance in its cloud computing business for the last quarter, with sales reaching $187.8 billion and profit climbing to $20 billion, up 10 percent and 88 percent from a year ago, respectively. However, the company warned investors of slowing growth in the near future, forecasting a 5-9 percent increase in sales for the current quarter, potentially with lower operating profit.
The cloud computing segment saw significant growth of 19 percent, amounting to $28.8 billion in revenue, reflecting Amazon’s investment in artificial intelligence. A Chinese start-up recently released an efficient A.I. system that Amazon quickly made available to its customers. CEO Andy Jassy believes that as A.I. becomes more affordable, customers will be inspired to innovate and spend more.
Amazon invested $26 billion in data centers, warehouses, and other capital expenses in the quarter, with plans to continue the rate of capital investments throughout 2025. Despite these investments, the company ended the year with more than $82 billion in cash.
Sales in Amazon’s North American retail business showed a 10 percent growth during the holiday shopping period, attributed to faster shipping and more efficient operations. The company delivered over nine billion items the same or next day in 2024.
Amazon’s North American operating margin exceeded 8 percent, a stark improvement from two years ago when it did not even break even. The company has focused on making its logistics more efficient and expanding profit-making areas like advertising, which surpassed $17 billion in sales.
Despite these positive aspects, Amazon’s share price was down more than 4 percent in after-hours trading following the announcement.
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