April 30 (Reuters) - Amazon.com reported quarterly results above Wall Street's expectations on Tuesday, as interest in artificial intelligence helped drive cloud-computing growth.
Shares of the Seattle-based e-commerce and tech company climbed 2.3% in extended trade, even after its current-quarter revenue forecast came in below expectations. The stock closed down 3.3% in the regular session.
Chief Financial Officer Brian Olsavsky told reporters on a conference call that capital spending would increase throughout the year, compared with $14 billion in the first quarter. "That will be the low point for the year as far as capex by quarter," he said.
He said Amazon wants to "invest upfront" to build out its AI offerings to meet customer demand.
Amazon is racing to keep abreast of rivals in offering generative AI software. Competitors include Alphabet as well as Microsoft-backed OpenAI.
First-quarter sales increased 13% to $143.3 billion, higher than the $142.5 billion average according to LSEG data. Net income more than tripled to $10.4 billion in the first quarter.
The company expects revenue of $144.0 billion to $149.0 billion for the current quarter ending June, compared with analyst consensus expectations of $150.07 billion, according to LSEG data.
"After a year and a half of cutting cloud costs, it appears that enterprise customers are ready to move more workflows to the cloud again, which is positive not just for Amazon, but also for many software companies that sell to enterprise customers," said D.A. Davidson analyst Gil Luria.
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Amazon Web Services (AWS), the largest provider of cloud-computing services, posted a 17% rise in revenue to $25.0 billion in the first quarter, compared with expectations of $24.53 billion.
That compares with a rise in cloud-computing revenue of 31% for Microsoft and 28% for Alphabet for the January-to-March period.
"The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate," said CEO Andy Jassy in a statement. He said AWS is now on pace to achieve $100 billion in annual sales.
Amazon bucked a Big Tech trend of announcing a dividend, after rivals Alphabet and Meta Platforms rolled out the investor goodie. The latter two announcements were cheered by investors who pushed the stock prices higher.
Amazon and Tesla remain the only members of the so-called Magnificent Seven tech stocks that do not offer dividends. Its shares have climbed about 15% in 2024, outperforming the S&P 500's gain of about 6%.
Net income of $10.4 billion, or 98 cents per diluted share, compared with $3.2 billion, or 31 cents per diluted share in 2023's first quarter. That beat analysts' average EPS estimate of 83 cents.
The company ended the quarter with 1.52 million employees, about 4,000 fewer than at year-end 2023, but higher than a year earlier by 56,000. That was despite Amazon cutting at least 27,000 jobs last year and continuing to trim positions across a number of units.
