Strong Performance by Amazon: AWS as a Growth Driver

The current earnings season shows mixed results among the giants of the tech industry. The stocks of Microsoft, Meta Platforms, and Apple faced setbacks after their earnings and forecasts fell short of expectations. These developments, emanating from companies considered to be the market's mainstays, could raise negative premonitions for the overall market. However, there's another side to the story. While some companies are grappling with challenges, others are standing out with strong performances. A look at the figures reported by Amazon supports this view. In the last quarter, revenue rose by an impressive 11% compared to the previous year, increasing earnings per share from $0.94 in the third quarter of last year to $1.43 in the current period. Here, Amazon even managed to overshadow Apple. Although Microsoft and Meta also reported revenue growth in the past three months, their forecasts were disappointing. Meta plans to significantly increase investments in artificial intelligence, while Microsoft estimates revenue of $68.1 billion for the December quarter—lower than the consensus of $69.8 billion. Amazon, on the other hand, expects revenue growth of about 9% in the current quarter and an increase in operating income by 36%. Remarkable. A decisive factor for the rise in Amazon's stock price was not just the overall figures. A key factor is its commitment to the cloud sector, especially through Amazon Web Services (AWS). AWS reported revenue growth of 19%, which increased operating income from just under $7 billion in the previous year to more than $10.4 billion in the third quarter of this year. The operating profit margin rose from 30% to 38%. AWS now contributes to 60% of Amazon's operating income, with potential for further growth.