Amazon shines but does not rejoiceThe e-commerce giant has published its fourth quarter 2024 results, recording revenues of $187,8 billionin growth of 10% compared to 169,96 billion in the same period of 2023. Net of an unfavorable impact of 0,9 billion due to exchange rates, the increase stands at 11%.
The group's core business - e-commerce and logistics - remains solid, managing to hold its own against both traditional giants such as Walmart and new emerging competitors such as Temu and Shein. During the crucial Christmas holiday period, Revenue increased by 10%, while the 'Operating profit reached $21,2 billion, beating market expectations.
THENet income he made a leap, reaching 20 billion dollars, doubleor compared to 10,62 billion in the same quarter of the previous year. Theearning per share rose to $1,86, beating analysts' forecasts for $1,49. The operating expenses increased, reaching 166,6 billion dollars (+6,2%), but at a lower pace compared to revenues, a positive trend that continues for the eighth consecutive quarter.
In 2024, Amazon stock has gained 44%, while since the beginning of 2025 it is already up 8,9%.
Solid numbers, but what a nthey don't heat up the market. THE uncertainties related to cloud computing performance and Cautious guidance for 2025 has dampened enthusiasm of investors, pushing the stock down in after-hours trading.
Cloud Computing: Growth Lower Than Expected
La Amazon Web Services Division (Aws), dedicated to cloud computing, has, in fact, recorded a growth of 19%, reaching $28,8 billion in revenue, slightly below of the 28,9 billion expected by analysts.
The cloud computing industry is a strategic point for Amazon, as it represents one of the main investment areas to support the development of Artificial Intelligence. According to UBS, the main hyperscalers – that is, the technology giants that provide large-scale infrastructure – will invest a total of 328,5 billion dollars in 2025. Growing competition from Asia, and in particular Chinese innovation, is, however, changing the balance of the sector. The DeepSeek's 'low-cost' AI launch It has in fact raised questions about the actual need for such massive investments.
Le expense Amazon's capital expenditures in the last quarter of 2024 were $26,3 billion, largely earmarked for projects related to Artificial Intelligence within AWS. Andy jassy, CEO of Amazon, anticipated that similar investments will be made in 2025.
Amazon to invest $100 billion in AI
Amazon has announced a $100 billion investment in 2025 to boost cloud computing and the development of microchips for Artificial Intelligence.
Jassy warned, however, that AWS could addressing capacity constraints despite these investments. “It is true that we could grow more rapidly if there were no capacity constraints“, explained the CEO during the presentation of the results, referring to the limited availability of hardware and electricity to power cloud services. A problem that affects other big names in the sector. Jassy also highlighted difficulty in sourcing microchips, both third-party and internally developed, which slow down the activation of new data centers but that the situation will improve in the second half of 2025.
Amazon: Is It Coming to Overtake Walmart?
Another positive element that emerges from this quarterly report for Amazon is the possible overtaking of Walmart in terms of revenues. Walmart is forecast to report $180 billion in fourth-quarter revenue, lower than Amazon's $187,8 billion. If that trend holds, Amazon would become the world's largest retailer by revenue, reaching a historic milestone in the challenge between the two commercial giants.
Amazon Stocks Fall in After-Hours Trading
Despite the better-than-expected results, the The company's guidance for the first quarter of 2025 disappointed the marketAmazon expects revenue between $151 billion and $155,5 billion, with an estimated growth of 5% to 9%, while analysts had expected $158,5 billion.
Following this cautious forecast, the Amazon title also fell 4% in after-hours trading. Investors are concerned about the potential impact of its heavy investments in artificial intelligence on future profits. For the quarter ending in March 2025, Amazon expects operating income to be between $14 billion and $18 billion, compared to the $18,2 billion analysts had expected.
