Amazon on Thursday reported impressive second quarter sales growth that beat Wall Street’s projections, with the e-commerce giant hitting $167.7 billion in quarterly revenue, driven by gains from its advertising and cloud businesses. At the same time, CEO Andy Jassy reiterated the company is focused on leveraging artificial intelligence to make its products better for customers — a claim several other tech executives are making this earnings season.
“Our conviction that AI will change every customer experience is starting to play out,” Jassy said in a statement accompanying Amazon’s report.
The 57-year-old chief executive, who took over the top job after Amazon founder Jeff Bezos stepped down in 2021, pointed to several examples where AI is now integral to the company, from its updated Alexa voice assistant to its updated shopping agent. Jassy also said AI is helping write code and will be critical towards Amazon reaching its goal of using 1 million robots to ship packages quicker.
“Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I’m excited for what lies ahead,” Jassy added.
Despite topping what analysts were looking for when it came to sales and earnings, Amazon’s stock price still dropped after its report came out; more on that in a moment.
First, here are the key figures from Amazon’s report:
Net Sales: Amazon reported $167.7 billion in second quarter revenue, up 13% year-over-year and topping the $162 billion that Wall Street analysts had projected.
This was Amazon’s second-best quarter ever in terms of sales, only trailing the holiday quarter of 2024, when it reported $187.80 billion in revenue.
Two segments that stood out: advertising, where sales increased 23% year-over-year to $15.69 billion, and Amazon Web Services, the company’s cloud business, which grew 17.50% annually to $30.90 billion.
The bulk of Amazon’s sales continue to come from North America, where revenue was up 11% to $100.10 billion between April and June.
Earnings Per Share: Amazon’s $1.68 EPS also came in well ahead of the $1.33 analysts were looking for.
Net Income: $18.20 billion, which was $4.70 billion more than the company reported during the same quarter a year ago.
Jassy’s latest comments come after he told employees in a May memo that Amazon will be prioritizing AI development in the years ahead — similar to what tech executives like Meta boss Mark Zuckerberg have said this week; Meta’s stock, after it topped sales and earnings projections from analysts on Wednesday, raced to a new all-time high on Thursday.
Investors were not as bullish on Amazon in after-hours trading, though, with its stock dropping 3.08% to $226.91 per share about a half-hour after its report came out. Heading into Thursday afternoon, Amazon’s stock was up 6.31% since the start of the year.
One reason for Amazon getting a different response from investors, at least at first glance, could be its forecast for the third quarter. Amazon projected sales would be between $174 billion and $179.50 billion, and it warned “changes in global economic and geopolitical conditions” and “tariffs and trade policies” make its performance “inherently unpredictable.”
On the AI front, Amazon launched Alexa+, the AI-powered “next generation” of its trademark virtual assistant, earlier this year. And in more recent AI news, Amazon on Wednesday invested in Fable Studio, the company behind the Showrunner platform, which allows users to create TV shows with its artificial intelligence model. You can read more about that deal by clicking here.
An interesting bullet in Amazon’s report said the company enjoyed its “biggest Prime Day” ever, without sharing specific sales figures. That stands out, considering there were reports sales on the first day of Prime Day — the event now spans four days in early July — were down 41%.
Jassy, on the company’s earnings call on Thursday afternoon, pointed to Amazon’s “momentous partnership” with Roku in June, which he said gives its advertisers access to “80 million connected TV households.” And the company said the growth of its cloud services business was accelerated in the second quarter thanks to new deals with Warner Bros. Discovery Sports, PepsiCo, and Airbnb.
Amazon did not have much to say about its entertainment business, but it did note that Amazon MGM picked “Dune” filmmaker Denis Villeneuve to direct the 26th James Bond film at the end of June.
