Episode summary
Instant Reaction: Amazon Reports Cloud Sales Growth for Fifth Straight Quarter | Bloomberg...
Bloomberg Surveillance
· · 21 min · Hosts: Carol Massar, Tim Stenovec, Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Ed Ludlow, Poonam Goyal, Anurag Rana
Summary
Amazon’s latest results were framed as a broad beat across the business, with the biggest focus on AWS. The analysts said cloud revenue rose 37% to $42.2 billion, well ahead of the $40.6 billion consensus, and described the quarter as the fifth straight period of accelerating cloud sales. They pointed to stronger margins as a surprise, since many had expected heavy AI spending to pressure profitability.
The conversation centered on why AWS is holding up so well. The analysts argued that Amazon’s edge comes from its long enterprise relationships, its role as the largest public cloud provider, and its growing use of in-house chips, which may reduce dependence on Nvidia and lower token costs over time. They also said the AI opportunity looks strongest when it is embedded in enterprise applications rather than just model training.
On the retail side, the analysts said Prime Day shifting into the second quarter helped lift online sales and advertising, while Alexa for shopping is improving conversion and customer engagement. The main open question was how much of this quarter’s strength was pulled forward from later in the year, and whether AWS growth can keep accelerating from here.
Key takeaways
- AWS revenue grew 37% to $42.2 billion, beating the $40.6 billion estimate and marking its fastest growth since 4Q 2021.
- The analysts said Amazon’s AWS margins improved even as the company invested more heavily in AI infrastructure.
- The analysts argued Amazon’s custom chips could lower costs and reduce reliance on Nvidia as AI workloads scale.
- Prime Day moving into 2Q likely boosted retail and ad results, but it may also make 3Q guidance look softer.
- The analysts said Alexa for shopping is helping conversion and engagement, even if it is still too small to move Amazon’s overall financials much.
Notable quotes
“I would have expected margins to go down with all these investments. It actually went up”
“If Amazon can go and figure out their workloads onto their own chips, it saves them massive amount of money”
“The retail numbers were particularly good and that was expected because we had the Prime Day shift moving in from 3Q to 2Q”
“it's a pretty straightforward set of numbers where, you know, they will be peppered with questions on the call”
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 after market. Let's get to it with our team, two members, killer members, if you will, of our Bloomberg Intelligence team. I was talking about Poonam Goyal, she's Bloomberg Intelligence senior analyst for e-commerce and athleisure, and Anurag Rana, Bloomberg Intelligence senior technology analyst. Poonam, let me kick it off with you in terms of Amazon.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- aws revenue growth
- cloud computing
- ai demand
- analyst estimates
- earnings reaction
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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