Amazon’s stock prices have been climbing, currently trading at nearly $180/share, which is a rebound from the decline in price that occurred throughout 2022. The company is expected to report its first quarter earnings, with analysts keeping an eye on key profit drivers such as advertising and cloud computing. Amazon is coming off strong results from its holiday quarter and is poised for continued growth.
Analysts are anticipating double-digit growth in Amazon Web Services (AWS), fueled by demand for generative AI tools and services. The company is making efforts to appeal to AI application developers by offering a variety of AI models through its Bedrock managed services. AWS reported profits of $7.2 billion on revenue of $24.2 billion in the fourth quarter, significantly contributing to Amazon’s overall business growth. Enterprise spending on cloud infrastructure is also on the rise, with a 20% increase in the fourth quarter of last year.
Amazon’s advertising business is expected to keep growing, with Wedbush analysts bullish about the company’s advertising potential. Advertising brought in $14.6 billion in revenue in the fourth quarter, a 27% increase from the previous year. Recent results from other tech giants like Meta, Alphabet, and Snap indicate a rebound in the digital ad market after a challenging 2022. Amazon CFO Brian Olsavsky has emphasized the importance of advertising in the company’s total business model.
Another key area to watch is Amazon’s headcount, as the company has undergone layoffs and continues to cut from its corporate workforce. Amazon employed 1.52 million people as of September 30, down 1% year-over-year. Changes in U.S. third-party seller fees could also help drive substantial revenue for the company. Amazon is expected to report revenue of $142.7 billion and earnings per share of $0.83 in the first quarter, compared to the year-ago quarter with revenue of $127.4 billion and earnings per share of $0.31.
