Amazon (NASDAQ:AMZN) is set to release its quarterly earnings after the bell on Thursday, following a week of tech giant reports that have ranged from high expectations to disappointment. As part of Big Tech’s wave of reports, Amazon’s earnings may provide insights into the growth of Amazon Web Services (AWS), the company’s cloud business, and its advertising operations, particularly Prime Video ads.
Key expectations for Amazon’s fiscal fourth quarter include
- Anticipated Revenue: $166.2 billion. Notable increase from $149.2 billion in Q4 2022.
- Adjusted Earnings Per Share: $0.78 expected ($0.03 in Q4 2022)
- Amazon Web Services (AWS): $24.2 billion expected ($21.4 billion in Q4 2022)
- Expected Advertising Expenditure: $14.2 billion, A significant rise from $11.6 billion in Q4 2022
Investors are likely to focus on the growth of AWS and the potential for increased ad revenue, especially following the recent introduction of ads on Prime Video. Amazon’s streaming service began displaying ads alongside content as the default option, offering a significant opportunity for ad growth given its vast audience.
While Amazon’s stock experienced robust gains last year, climbing over 80%, the momentum has slowed recently amid broader market shifts. The company will report its earnings alongside Apple and Meta to conclude the quarterly reports for Big Tech.
Amazon’s role in AI development is also of interest, with the company seeing the potential for generating substantial revenue for its cloud business. The launch of Amazon Bedrock, an AI service, and a $4 billion investment in AI startup Anthropic demonstrate Amazon’s commitment to AI.
Investors will closely scrutinize Amazon’s performance in the cloud business, especially compared to Microsoft Azure, its closest competitor. Recent market dynamics have applied a rigorous assessment to tech earnings, and how Amazon’s results fare in comparison to Microsoft’s will be a key consideration.
Additionally, details on Amazon’s vision for advertising, given its recent move to add ads to Prime Video, will be closely watched. The company’s substantial Prime household base and engagement with Prime Video position it as a disruptive force in the advertising video-on-demand (AVOD) space.
Overall, Amazon’s earnings report will offer insights into its various business segments, including cloud services, advertising, and AI development, providing a comprehensive view of the company’s performance and prospects.
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