Explosive Profits: Amazon Shares Skyrocket After Q1 Revenue & Profit Wins

Amazon, which is a Seattle-based company, had an awesome quarter! Their revenue grew to $127.4 billion from the previous year’s first quarter of $116.4 billion – even more than what people predicted it would be. Even though their cloud computing division went a bit slower in growth, their stocks still went up in after-hours trading.

Amazon made a really good profit this quarter, which was $3.2 billion or 31 cents per share, more than the industry analysts had predicted ($2.24 billion). This is much better compared to the same period last year when Amazon suffered its first quarterly loss in years due to losses on its investment into Rivian Automotive (an electric vehicle company). After people heard about this news, the stock for Amazon rose by 9%.

This week has been a big one for tech companies as they have reported their earnings. On Wednesday, Facebook’s profits and revenues were higher than what was expected and its stock prices went up after the news. Microsoft had an awesome showing with their cloud service Azure bringing in more profits on Tuesday. Google also saw profit due to their own cloud business which jumped by 28% but at a slower rate compared to last year.

Amazon’s CEO Andy Jassy said in a letter to shareholders last week that AWS, which is the top cloud provider, might not do as well financially this year because companies are not spending as much due to economic concerns. Then on Thursday, Amazon mentioned that AWS grew by 16%, which was more than what analysts thought, but way slower compared to 37% growth rate seen 12 months ago.

Shoppers are trying to save money these days, so they don’t rely on buying things online like they used to. This made Amazon’s earnings go down by 3%, even though they reported record revenue a while ago.

Amazon is trying to save money in order to prepare for slower online sales and the possibility of a financial downturn.

Last year, the company started to cut back by not doing their expansion plans and lowering the amount of people in some locations. Recently, they’ve made bigger cost-saving changes like letting go of 27,000 positions within departments like advertising, Twitch (a live streaming website that Amazon bought in 2014), healthcare (like Amazon Care and Amazon Glow), plus fabric.com. Wednesday it was said that a health device with a membership service called Halo will be completely shut down on August 1st.

In February, Amazon had to close some of their smaller stores like Amazon Fresh and Go because they were having trouble making profits in their grocery business. They also stopped building the second part of their headquarters in Virginia. There may be over thousands of people working there soon when it officially opens up in June. The government is giving Amazon $152.7 million dollars for bringing these jobs to Virginia.

Jassy is confident that Amazon can reduce their expenses. He also said they will continue to spend on healthcare, developing AI tools and the Kuiper project which they announced in 2020. This project provides satellite-based internet services.