Amazon.com Inc
Apple Inc
Second Quarter Highlights
Amazon generated $134.4 billion in revenue that grew 11% YoY and resulted in a net income of $6.7 billion, or 65 cents a share. What a difference compared to 2022's comparable quarter when Amazon made a loss of $2 billion, or 20 cents a share, owed to its markup of EV startup, Rivian Automotive
Segments
AWS growth stabilized as customers put cost management aside to focus on new workloads, leading to a 12% in revenue to $22.1 billion that topped Wall Street's estimate of $21.8 billion. Still, it was a deceleration compared to previous quarter's 16% growth while also being the slowest growth rate since 2015, which is when Amazon started disclosing cloud revenue. During the reported quarter, AWS made 70% of the company's operating profit that amounted to $7.7 billion.
CEO Andy Jassy emphasized that although the company's big bet on AI still hasn't resulted in faster gains for AWS, prospects remain bright as the tech giant continues to experiment with the e-commerce shopping experience and using it to sum up customer feedback on products. Moreover, Jassy noted that generative AI releases strengthened the leadership position of its cloud business that competes with Alphabet Inc
Advertising continues to boom with unit revenue skyrocketing 22% to $10.7 billion, topping the $10.4 billion that Wall Street expected. For the sake of comparison, Meta Platforms Inc
According to Insider Intelligence, Amazon holds 7.3% of the worldwide digital ad market, while Alphabet owns 28.8% and Meta 20.5%. Apple damaged Meta with its 2021 iOS privacy update by limiting its power to target ads, as some companies and retailers shifted their ad budgets to platforms like Amazon. As a result, Amazon's ad business expanded over the past year while Meta's core digital ad business shrank last year. Although its latest result showed Meta is rebounding, it is just not doing it at the cost of Amazon's share that keeps on growing.
Third Quarter Guidance
Fueled by the success of July's 48-hour Prime Day discount event that Amazon touted as its biggest ever, sales for the undergoing quarter are now expected in the range between $138 billion and $143 billion, which implies a growth rate between 9% and 13%.
Amazon And Apple Wrapped Up The Big Tech's Q2 Reports
While growth that mega tech companies reported remains below historical standards, results show that they are rebounding after a tough year with cost-control initiatives fueling profitability. What these Big Tech reports all have in common is that they are going full speed ahead in the same direction- towards a generative AI-powered future.
DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.