Amazon, the e-commerce giant that became one of the largest players in the global technology sector over time, on Thursday, February 6, published information on the financial performance of its activities for the fourth quarter of last year.
The mentioned results exceeded Wall Street’s preliminary expectations. The strong holiday shopping season contributed to the growth of the company’s retail business. At the same time, investors drove shares down due to the weakness of the reading demonstrated by the firm’s cloud computing unit.
The value of Amazon equities fell 4% in extended trade after information about the business giant’s earnings for the last quarter of 2024 was published. Against this background, the company’s market capitalization decreased by about $90 billion. The corresponding figure is $2.5 trillion.
Amazon’s revenue for the fourth quarter of 2024 was recorded at $187.8 billion mark. This indicator showed an increase of 10% year-on-year. At the same time, LSEG’s preliminary forecast, which is an average estimate based on a survey of analysts, provided that the business giant’s revenue for the last three months of 2024 would be fixed at the $187.3 billion mark.
The company’s net income for the fourth quarter of the past year was $20 billion. For the same period in 2023, the corresponding figure was recorded at the $10.6 billion mark. Earnings per share amounted to $1.86. LSEG’s preliminary forecast predicted that this figure would reach $1.49 in the last three months of 2024.
Amazon’s revenue for the whole of last year was recorded at the $638 billion mark. This indicator showed an increase of 11% compared to the figure fixed in 2023.
The company’s net income for 2024 was recorded at the $59.2 billion mark. In 2023, the corresponding figure was $30.4 billion.
The cloud unit of the business giant, which is Amazon Web Services (AWS), generated revenue of $28.78 billion in the fourth quarter of 2024. This indicator increased by 19% year-on-year. At the same time, LSEG’s preliminary forecast predicted that the mentioned segment of the company’s operations would generate revenue of $28.87 billion in the fourth quarter of 2024. It is worth noting that it is the activities of AWS that ensure the sustainable presence of the business giant in the technology sector as one of the largest players in the relevant functional space. It is noteworthy that recently the cloud units of other companies have been demonstrating financial results that do not meet the preliminary more optimistic expectations. In the corresponding context, it is worth mentioning as an example the reports published by Microsoft and Google.
It is worth noting that a kind of economic weakness of cloud technologies is observed at a time when investors are showing increasing interest in early returns from large-scale financial injections into the artificial intelligence industry. The appropriate issue is gradually becoming more relevant. It is possible that soon there will be a thesis among investors that their financial injections into the artificial intelligence industry have not generated a quick result. This circumstance, which is highly likely to be stated as an accomplished fact, does not negate that the area o of machine intelligence contains significant and even in a certain sense revolutionary prospects in terms of possible transformative effects on the world in the context of its economic, political, social and cultural dimensions. The problem for investors is the uncertainty about the timing of returns from financial injections into the artificial intelligence industry. At the same time, the development of AI is a fact already being realized and yet continues to be a long-term prospect in terms of its yet-to-be-implemented potential.
Microsoft and Google reported a slowdown in cloud technology growth in the last quarter of 2024. Against this background, a drop in stocks was recorded. The companies, along with Meta, reported that the costs for developing infrastructure for artificial intelligence software significantly exceeded the expected capital expenditures for 2025.
Amazon’s online retail business segment generated revenue of $75.55 billion in the fourth quarter of 2024. This indicator showed an increase of 7% year-on-year. LSEG’s preliminary forecast predicted that Amazon’s revenue from online sales in the fourth quarter of 2024 would reach $74.55 billion.
Advertising sales brought the business giant $17.28 billion in revenue in the last three months of the past year. This figure increased by 18% compared to the reading recorded for the same period in 2023. LSEG’s preliminary forecast predicted that the mentioned segment of Amazon’s operations would generate revenue of $17.4 billion in the fourth quarter of 2024.
The business giant expects its revenue for the first quarter of 2025 to be fixed between $151 billion and $155.5 billion. The corresponding forecast provides for the mentioned indicator to grow by 5-9% compared to the reading recorded for the same period in 2024.
Andy Jassy, president and chief executive officer of Amazon, said that the holiday shopping season was the most successful yet for the company.
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