By AJ Dellinger
E-commerce retail giant Amazon surpassed Wall Street expectations in the third quarter of 2023, driven by the strength of its growing advertising business and rebounding sales figures.
Amazon reported a net income of $9.9 billion for the quarter, a significant increase over the $2.9 billion posted in the third quarter of last year. The company saw quarterly revenue hit $143.1 billion, which topped analyst estimates of $141.6 billion.
The company’s stock bumped up nearly 4% in after-hours trading following its strong earnings report. By Friday morning, Amazon shares were up more than 6% in premarket trading.
Amazon’s report included $12 billion in revenue from its advertising business, a 26% increase year over year. This continues the trend of similarly strong showings in digital advertising from other major tech players including Alphabet, Meta, and Snap.
Sales were also strong through Amazon’s third quarter, posting a 12% increase year over year. The company had struggled to meet expectations in 2022 but has now seen multiple quarters of growth in sales, which has made the company one of the top-performing tech stocks through 2023.
If there is one area of disappointment for Amazon’s third quarter, it’s with its cloud business. Amazon Web Services (AWS), produced $23.1 billion in revenue, up 11% year over year and topping last quarter’s mark of $22.1 billion. But the company fell just short of Wall Street expectations, which had marked $22.3 billion as the target.
This follows Google parent company Alphabet’s similarly underperforming cloud operation, which also fell short of Wall Street expectations. While the emergence of artificial intelligence was thought to be a boost to cloud operations, the growth has yet to materialize.
Amazon’s positive earnings report comes one month after the Federal Trade Commission (FCC) and 17 states sued the company for allegedly abusing its power in the market to inflate prices and stifle competitors.
This post and headline have been updated to reflect Amazon’s stock movement on Friday morning.