Episode summary
Instant Reaction: Amazon Reports Cloud Sales Growth for Fifth Straight Quarter | Bloomberg...
Bloomberg Intelligence
· · 18 min · Hosts: Carol Massar, Tim Stenovec · Guests: Ed Ludlow, Poonam Goyal, Anurag Rana
Summary
Amazon’s latest quarter showed broad strength, but the clearest signal was in AWS, where cloud revenue jumped 37% to $42.2 billion and beat estimates of $40.6 billion. The panel argued that AI demand is helping accelerate growth for the fifth straight quarter, while margins held up better than expected despite heavy investment.
The discussion focused on why AWS still has a strategic edge. The analysts said Amazon’s long enterprise history, large installed base, and ties to Anthropic make it especially well positioned for enterprise AI adoption. They also pointed to Amazon’s custom chips, including Trainium, as a way to reduce reliance on Nvidia and improve unit economics as AI workloads scale.
Retail was also part of the story. Prime Day shifting into the second quarter boosted online sales, and the panel said Amazon’s AI tools, especially Alexa for shopping, are improving conversion and customer engagement. Still, they noted that the financial impact on retail remains modest relative to the company’s massive scale.
Key takeaways
- AWS revenue rose 37% to $42.2 billion, and the panel said the beat was especially strong because the business also held margins up.
- The analysts said Amazon’s enterprise cloud base and its relationship with Anthropic give AWS an advantage in enterprise AI adoption.
- Amazon’s Trainium chip strategy could lower costs by keeping more AI workloads on its own silicon instead of Nvidia GPUs.
- Prime Day timing helped retail and advertising, with the panel saying the shift into the second quarter likely lifted both businesses.
- Poonam Goyal said Alexa for shopping is improving conversion, but the effect is still small relative to Amazon’s nearly trillion-dollar GMV scale.
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, going from uh to 37 in constant currency is phenomenal just because the size of this business is so large”
“The number of the chips is the one that I find it more exciting because here is the thing”
“When they introduced Alexa for shopping, for example, Alexa Plus, it's pretty clever”
“if if Google gets all the credit for TPU, then should Amazon get some credit for for those tranium chips too”
How the episode opens
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 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. PUM let me kick it off with you in terms of uh Amazon. What's jumping out here for you?
Look, it looks like broad-based strength across the board. The retail numbers were particularly good and that was expected because we had the Prime Day shift moving in from 3Q to 2Q. So overall, uh really nice numbers here on the retail side.
Consumers came to Amazon to shop Prime Day sales and the shift to online just continues to appear more and more apparent as we move through a tough consumer spending cycle. What's this third quarter net sales miss 197 to 202 billion the estimates were $24 billion pun
I think part of it is the prime day shift right when you think about — But analysts knew about that so they should have — They did but we don't know how much right we don't know how much in dollar volume has moved into if you look at the beat that we saw analysts were expecting revenues to be up um but they came in even higher than that right 13.7% online revenues was the expectation and they came in at 15% so a couple of billion dollars there could be part of the movement that we're seeing here in the guidance as well.
All right, Anna, come on in on here.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amazon web services growth
- ai services demand
- cloud computing revenue
- analyst estimate beat
- e-commerce cloud sales
Companies and tickers mentioned
- AMZN
- Amazon.com
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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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