Amazon shares rose in late trading Thursday after the company reported first-quarter earnings and revenue that topped Wall Street forecasts.
Adjusted earnings came in at $2.78 per share, well above the $1.64 expected. Revenue jumped 17% year-over-year to $181.52 billion, surpassing the $177.3 billion target. Net profit hit $30.3 billion, up from $17.1 billion a year ago.
Amazon Web Services posted $37.59 billion in sales, a 28% increase, beating the $36.64 billion consensus. AWS now accounts for nearly 21% of total revenue. While AWS remains the cloud market leader, rivals Microsoft Azure and Google Cloud each reported strong gains.
The company is spending heavily on AI infrastructure. Capital expenditures are expected to reach $200 billion this year, up sharply from last year. Amazon has struck major deals with AI firms including OpenAI, Anthropic, and Meta. Free cash flow over the past 12 months dropped 95% to $1.2 billion, largely due to AI investments.
CEO Andy Jassy told analysts that Amazon's custom chip business-including Graviton, Trainium, and Nitro processors-surpassed a $20 billion annual revenue run rate for the first time.
Amazon also detailed plans for its satellite internet service, Leo. CFO Brian Olsavsky said the company aims to launch commercial operations in the third quarter. Currently, Leo has 270 satellites and wants to expand to about 7,700. Amazon recently agreed to acquire satellite operator Globalstar for $11.6 billion. That deal will also strengthen ties with Apple, which holds a 20% stake in Globalstar.
Looking ahead, Amazon forecast second-quarter revenue between $194 billion and $199 billion, above the consensus estimate of $188.9 billion. Online store sales rose 12% to $64.3 billion, while advertising revenue jumped 24% to $17.24 billion.