AWS grew revenue by 19%, but still lags behind Microsoft Azure and Google Cloud in terms of growth

Amazon.com, Inc. announced results for the second quarter of 2024, ended June 30, 2024. The company’s shares fell 6% in extended trading due to lower-than-expected earnings and weaker guidance from Wall Street analysts. However, the company continues to invest more and more in the development of cloud infrastructure, including for AI workloads.

Amazon’s revenue was $147.98 billion, up 10% from $134.38 billion in the same period last year. However, revenue was below the $148.56 billion consensus of analysts surveyed by LSEG. The company’s operating profit rose to $14.67 billion from $7.68 billion a year earlier. Net income increased from $6.75 billion ($0.65 per diluted share) last year to $13.48 billion ($1.26 per diluted share), with Wall Street analysts’ consensus estimate of $1.03 per diluted share.

Image source: AWS

The cloud division of Amazon Web Services (AWS) increased sales year-on-year by 19% to $26.28 billion in the quarter from $22.14 billion a year earlier, with the consensus forecast of analysts polled by StreetAccount at $26.0 billion. Operating profit increased from $5.36 billion in the second quarter of 2023 to $9.33 billion. Although AWS beat analysts’ revenue forecasts, its growth rate was lower than that of the cloud divisions of Microsoft and Google, which increased sales by 29%. However, the figures they announced include not only cloud infrastructure.

Due to high demand for AI technology, Amazon is spending significant amounts of money to expand its AWS cloud infrastructure. Amazon’s capital expenditures and leasing totaled $30.5 billion in the first half of the year, and that figure is expected to rise in the second half, says Amazon CFO Brian Olsavsky. “The majority of the spending will be to support the growing need for AWS infrastructure, as we continue to see strong demand for both generative AI and non-generative AI,” GeekWire quotes him as saying.

Amazon forecast revenue for the current quarter in the range of $154 billion to $158.5 billion, representing growth of 8% to 11% year over year. The midpoint of that range, $156.25 billion, lags the average estimate of $158.24 billion among analysts surveyed by LSEG.