Amazon stock jumped in the pre-market trading following the release of its third-quarter earnings report, outshining Wall Street expectations with impressive revenue and profits.
The e-commerce giant reported revenues of $143.1 billion for the third quarter ended in September, beating analysts’ estimates and marking a 13% year-over-year increase.
The company posted quarterly profits of $9.9 billion, beating estimates and further impressing investors.
Amazon Web Services, a consistent profit powerhouse for the company, witnessed a robust 12% surge in quarterly sales, reaching $23.1 billion. Additionally, Amazon reported $12.1 billion in advertising revenue, reflecting a 26% surge from the same period in the previous year. Sales in North America saw an 11% year-over-year increase, reaching $87.9 billion.
Investor enthusiasm is evident, with Amazon shares surging over 5% in pre-market trading Friday. In 2023, Amazon stock has surged by an impressive 40%, surpassing both the S&P 500 and the tech-heavy Nasdaq index.
This robust sales growth follows a challenging 2022 for Amazon.com, Inc. (NASDAQ: AMZN) and the broader tech sector, marked by aggressive cost-cutting efforts. Amazon disclosed plans to cut 9,000 jobs in March and the 18,000 layoffs announced in January.
The mass layoffs came after Amazon witnessed a surge in demand for its services at the onset of the pandemic, with people turning to e-commerce due to lockdowns and restrictions. However, demand dwindled last year as pandemic restrictions eased, and concerns over rising inflation and macroeconomic uncertainties weighed on consumer spending.
Amazon.com, Inc. (NASDAQ: AMZN) has demonstrated steady revenue growth in 2023, indicating CEO Andy Jassy’s cost-containment efforts across the sprawling business empire are paying off.
Zak Sambor, a senior analyst at Insider Intelligence, in a note on Thursday afternoon following the release of Amazon’s earnings results, stated:
“The retail giant’s slowdown last year appears to be in the rearview mirror as it has embarked on significant cost-cutting throughout this year and sharpened its focus on key growth areas.”
Amazon’s upbeat earnings report arrives amidst legal challenges. Last month, the Federal Trade Commission and 17 states filed a landmark monopoly case against Amazon, alleging the abuse of economic dominance and unfair competition.
Amazon’s earnings report coincides with fellow tech giants, including Microsoft, Google, and Meta, all reporting robust sales growth. This signals that Big Tech companies are forging ahead and defying fears of near-term economic weakness.