Episode summary
Instant Reaction: Amazon Reports Cloud Sales Growth for Fifth Straight Quarter | Bloomberg...
Bloomberg Daybreak: US Edition
· · 21 min · Hosts: Carol Massar, Tim Stenovec · Guests: Ed Ludlow, Poonam Goyal, Anurag Rana
Summary
Amazon’s aftermarket rally followed a strong AWS print and an upbeat read on how AI demand is flowing through the business. The company said cloud-computing revenue at Amazon Web Services rose 37% to $42.2 billion, ahead of the $40.6 billion consensus, marking the fastest growth since the fourth quarter of 2021 and the fifth straight quarter of accelerating cloud sales. The discussion centered on how much of the upside came from AI workloads, enterprise adoption, and Amazon’s custom chips rather than Nvidia GPUs.
The analysts said the result was broad-based, with retail also helped by the timing shift of Prime Day into the second quarter. They said that shift likely lifted online sales and may have pulled some demand and advertising dollars forward, while also making third-quarter guidance look softer. One analyst argued that AWS margins were the biggest surprise because they rose despite heavy investment.
The conversation also emphasized Amazon’s position as the largest public cloud provider and a key enterprise AI platform. The panel argued that AWS’s stickiness comes from applications built directly on its cloud, plus growing use of Trainium and other in-house silicon, which could lower costs and improve margins if customers keep adopting it.
Key takeaways
- AWS revenue rose 37% to $42.2 billion, beating the $40.6 billion estimate and extending Amazon’s cloud growth streak to five quarters.
- The analysts said Prime Day’s move into the second quarter likely boosted retail and may have shifted some advertising and demand timing.
- One analyst said AWS margins rising alongside heavy AI investment was the biggest surprise in the print.
- The panel argued Amazon’s biggest AI advantage is enterprise adoption, where applications built on AWS become difficult to move later.
- Ed Ludlow said Amazon’s chip strategy matters because it can reduce the need to buy Nvidia GPUs and preserve margin.
Notable quotes
“Revenue jumped 37% to 42.2 billion at Amazon Web Services, which generates about a fifth of the company's revenue and most of its operating profit”
“I mean this is a beat on every metric where AWS absolutely matters most”
“the bigger thing, the biggest surprise for me was the margins”
“I don't really care that much about the AI net number. The number of the chips is the one that I find it more exciting”
“we think about it is the Pi is growing at such a fast pace. They will all make money”
How the episode opens
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Bloomberg Audio Studios podcasts, radio news. — This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world. shares of Amazon higher in the aftermarket. Let's get to it with our team, two members, killer me members if you will, of our Bloomberg Intelligence team. We're talking about Punam Goyle. She's Bloomberg Intelligence senior analyst for e-commerce and athleisure and Anna Ragana, Bloomberg Intelligence senior technology analyst.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amazon web services revenue growth
- ai cloud demand
- e-commerce analyst estimates
- operating profit contribution
- technology sector earnings
Companies and tickers mentioned
- AMZN
- Amazon.com
- Bloomberg Intelligence
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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