The company's cloud and advertising units drove growth.shares jumped 7% on Friday and neared an all-time high after the company reported better-than-expected earnings, driven by growth in its cloud computing and advertising businesses.The stock is up about 32% for the year, and touched $200.50 on Friday. It's highest close was $200, a mark the stock hit twice in July.
Revenue increased 11% in the quarter to $158.9 billion, topping the $157.2 billion estimate of analysts surveyed by LSEG. Earnings of $1.43 topped the average analyst estimate of $1.14.Sales in the Amazon Web Services cloud business increased 19% to $27.4 billion, coming in just shy of analyst estimates, according to StreetAccount. That was an acceleration from 12% a year ago, but trailed growth at rivalsAmazon's capital expenditures surged 81% year-over-year to $22.
"Amazon has integrated AI into what is the most diverse tech footprint of any mega cap, with multi-billion revenue streams in e-commerce, advertising, subscriptions, online video, and cloud," analysts at Roth MKM wrote in a note after the earnings report. They have a buy rating on the stock.Brian Olsavsky, Amazon's CFO, said on the earnings call that the majority of the company's 2024 capex spending is to support the growing need for technology infrastructure.
CEO Andy Jassy said the company plans to spend about $75 billion on capex in 2024 and that he suspects the company will spend more next year. "The increase bumps here are really driven by generative AI," Jassy said on the call."It is a really unusually large, maybe once-in-a-lifetime type of opportunity," he said, noting that shareholders"will feel good about this long term, that we're aggressively pursuing it."Amazon forecast revenue in the current quarter to be between $181.5 billion and $188.5 billion, which would represent growth of 7% to 11% year over year.