Amazon impresses with strong cloud business and heavily invests in AI infrastructure.

Amazon's recent quarterly results exceeded analysts' expectations, resulting in a remarkable post-market stock increase of up to 6%. Particularly impressive was the record operating profit in the company's cloud business, which contributed $110 billion to revenue alone. For the quarter, Amazon achieved earnings of $1.43 per share on total revenue of $158.9 billion, surpassing analysts' forecasts of $1.14 per share and $157.2 billion. The focus, however, was on Amazon Web Services (AWS), the company's cloud computing division, which has proven to be a significant growth driver in the AI era. AWS's operating profit increased by an impressive 50% year-over-year to $10.4 billion, while the division's revenue grew by 19% to $27.5 billion. The division's operating profit margin reached 38%, surpassing the previous year's 30%. This was despite massive investments in its own AI consumer goods and the expansion of AI services for corporate customers. There remains an open question as to how profits will develop when AWS's billion-dollar generative AI business, whose sales are increasing by over 100% annually, becomes more integrated into the broader Amazon Web Services operations. Amazon CEO Andy Jassy emphasized in Thursday's conference call that the company needs to invest heavily in AI infrastructure before it can be monetized. However, very healthy margins are expected in the generative AI sector over time. Amazon is currently increasing investments in its data center network to support both the established AWS businesses and generative AI. Additionally, expanded investments in automation and robotics within the warehouse network play a crucial role. Jassy explained that the company is convinced that AI will become a central component of automation efforts within the warehouses. For the entire year 2023, investments are expected to amount to $75 billion, representing a 50% increase compared to the first half of the year. By 2025, this amount is expected to be exceeded, potentially reducing short-term profits but representing a 'once-in-a-lifetime opportunity,' according to Jassy.