Amazon's Cloud Division Sees Strongest Sales Growth in a Year

Amazon's cloud division sees its strongest sales growth in a year, signaling a resume in tech investment largely owing to AI

Amazon Web Services announced its best sales growth in the latest quarterly earnings report. The numbers were the strongest in a year, indicating that the cloud unit is finally making a recovery from a downtrend. This was largely because of a resurgence in heavy investments in the technology space, especially AI.

While the cloud unit showed strong growth numbers, the company's sales forecast for this quarter didn't quite hit the mark. As per a report by Bloomberg, this hinted at some worries around the main e-commerce business, since consumers are still keeping a check on their spending habits.

The CEO of the company, Andy Jassy, has prioritized the profitability lane but has simultaneously announced massive job cuts as well. He has also been backing heavy investments in AI space as the same is reportedly expected to generate billions in revenue in the coming future. This was quite visible in the latest sales figure growth.

Earlier this year, the company reportedly terminated nearly 18,000 employees. This was followed by various big tech companies announcing layoffs in record numbers. 

Amazon reported an operating profit of $15.3 billion for the quarter ending March. Meanwhile, the revenue figures witnessed a 13 per cent rise to $143.3 billion.

The cloud arm, Amazon Web Services', sales reached $25 billion, marking a 17 per cent increase compared to the previous year.

“We’re seeing strong demand signals from our customers on the AWS side,” Chief Financial Officer Brian Olsavsky stated in an earnings call. “They’re signing longer deals with larger commitments, many with generative AI components.”

AWS reported a profit of $9.42 billion, whereas the operating margin stood at 37.6 per cent. The figure represented the highest margin since Amazon started reporting sales figures for its cloud business. 

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