Amazon profits leap 35% as AI investments spark growth
Amazon Posts a 35% Surge in Q2 Profits, Crediting AI Expansion
Seattle‑based Amazon announced a 35% jump in quarterly earnings, attributing the growth to the company’s rapid AI investments.
Financial Highlights
- Net profit: $18.2 billion for Q2 (vs. $13.5 billion a year ago)
- Net sales: $167.7 billion, up 13% and beating analyst expectations
- Growth reflects Amazon’s resilience amid the high‑tariff trade policy under former President Donald Trump
AI‑Driven Customer Experience
- CEO Andy Jassy pledged that AI will revolutionize every customer interaction
- Apple+ expansion and new AI shopping agents were highlighted as key customer‑centric AI initiatives
Amazon Web Services (AWS) Leads the Charge
- AWS sales increased 17.5% to $30.9 billion
- Operating profit rose to $10.2 billion from $9.3 billion a year earlier
- Demand for cloud infrastructure to power AI applications is surging, benefiting AWS and other cloud providers
Investor Sentiment and Cash Flow Concerns
- After‑hours trading saw Amazon’s share price fall more than 3% despite stellar results
- Free cash flow dropped sharply to $18.2 billion (vs. $53 billion a year ago) as capital spending on AI infrastructure and logistics increased
- Investment in property and equipment reached $32.2 billion in Q2, nearly double the $17.6 billion a year earlier, reflecting data center and backroom expansion
- Amazon pledged up to $100 billion in AI‑related investments for AWS this year
Q3 Forecast and Investor Outlook
- Net sales forecast: $174–$179.5 billion (10–13% growth vs. Q3 2024)
- Operating profit forecast: $15.5–$20.5 billion (lower than some expectations, likely contributing to investor disappointment)
