Amazon's Revenue Surges to $123B, AWS Growth Lags Competitors
Amazon, the tech behemoth, has reported remarkable financial figures. Its annualized revenue run rate stands at $123 billion, with a backlog of $195 billion, marking a 25% year-over-year increase. Meanwhile, Amazon Web Services (AWS) and advertising revenues have also seen significant growth.
AWS, a key driver for Amazon, saw revenues grow by 17.5% to $30.9 billion. This growth, while notable, lags behind competitors like Microsoft and Google. Additionally, Amazon's lack of a clear AI strategy has left investors cautious about its potential for future growth.
Amazon's advertising business, however, has shown robust growth, increasing by 22% to $15.7 billion. This arm of the business reaches an audience of over 300 million people in the U.S., bolstered by partnerships with Roku and Disney.
To reach a market capitalization of $5.75 trillion by 2030, as projected by analysts, Amazon needs to maintain growth in AWS at a low-to-mid-teens percentage, and in advertising at a high-teens to 20% rate. Improving retail margins through its regional logistics structure and automation, including its DeepFleet AI system, will also be crucial.
Amazon's recent revenues were up 12% year over year to $167.7 billion, with operating income surging 31% to $19.2 billion. Despite these positive indicators, Amazon's market capitalization reaching $5 trillion by 2030 will depend on its ability to maintain and accelerate growth in its key business segments.
