Episode summary
Instant Reaction: Amazon Jumps After Sales, Profit Tops Estimates | Bloomberg Intelligence
Bloomberg Intelligence
· · 17 min · Hosts: Paul Sweeney, Ed Ludlow · Guests: Poonam Goyal, Eric Clark
Summary
Amazon’s third-quarter report reassured investors who had been worried the company was losing momentum in cloud. The host said net sales of $180.17 billion beat estimates, while AWS revenue excluding FX rose 20%, the fastest pace since late 2022 and well ahead of expectations. Shares jumped in after-hours trading, reflecting relief that Amazon is still seeing strong demand in cloud, advertising and retail.
An analyst said the report was strong across the board, with AWS the clear bright spot and advertising still a high-margin engine. The one softer area was North America margin pressure, which she linked to Amazon’s effort to keep prices low, protect market share and keep investing in faster shipping and fulfillment. She also said Amazon’s retail business is finally around break-even to profitable, with automation likely to help further.
A guest focused on the strategic significance of AWS returning to above-20% growth and on Amazon’s custom Tranium 2 chip, which the company described as a multi-billion dollar business. The guest argued investors are rewarding Amazon for showing that prior AI and infrastructure spending is turning into visible revenue and operating leverage, even as layoffs and restructuring remain part of the story.
Key takeaways
- The host said Amazon’s third-quarter sales of $180.17 billion beat the $177.82 billion consensus and AWS growth hit 20%, sending the stock sharply higher after hours.
- An analyst said AWS was the bright spot and advertising grew 22% in constant currency, with the ad business carrying estimated margins of 75% to 80%.
- The analyst said North America margins were weaker because Amazon is keeping prices low and continuing to invest in faster shipping and fulfillment.
- A guest said AWS’s return to above-20% growth matters because investors had been worried about cloud share losses and wanted proof Amazon’s AI spending was paying off.
- The guest said Amazon’s Tranium 2 custom chip is being described as a multi-billion dollar run-rate business, which adds credibility to its AI infrastructure push.
Notable quotes
“sales were very good across the board across all business segments. AWS online advertising even physical stores”
“AWS was probably the bright spot here. 20% gains. We haven't seen that in a while”
“Amazon's retail business is finally break even to profitable. It took a long time to get here”
“It's doing really well. It grew 22% in constant currency in the quarter”
“this is a multi-billion dollar run rate business. the offering their in-house chip to third-party customers”
How the episode opens
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From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- aws revenue growth
- amazon earnings reaction
- cloud competition
- ai product impact
- market stock move
Companies and tickers mentioned
- AMZN
- MS
- GOOGL
- GOOG
- Amazon
- Microsoft
- Alphabet Inc.
- Accuvest Global Advisors
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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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