The stock price of Amazon (NASDAQ:AMZN) went up by 4% in after-hours trading on Thursday after the company came out with an impressive earnings report for the first quarter. The stock went up to $961.44, which is an all-time high and eventually settled down at $918.38. Many feels, it is about the go up considerably in the coming days considering the good results the company has posted.
Net Sales Are Up By 23 Percent
Amazon reported that the net sales have gone up by 23 percent to reach $35.7 billion, beating the expectations of analysts, who had said it would be somewhere around $35.3 billion. Much of the sales growth was because of the core e-commerce business of Amazon, which has been doing very well, making Amazon the leading online store in the world. But their cloud computing business, Amazon Web Services, did well too. AWS sales in the quarter were $3.7 billion, up from the $2.6 billion of last year.
The total profit for the quarter is $724 million, making it the eighth consecutive time the company has reported a profitable quarter. The net income has gone up by 41 percent, which is equivalent to $1.48 for each share of the business. Analysts had said this would be around $1.12 for each share.
Huge Investments Are Not Reducing Amazon’s Profits
But what is most impressive is that Amazon has been making big investments in opening retail stores, developing original content, and building hardware, but was still able to report a profit that was more than the expectations of most analysts. The business has also been investing in artificial intelligence, movie and TV productions, and new warehouses.
In recent years, Amazon’s (NASDAQ:AMZN) revenue has increased greatly as shopping has moved online, and more and more businesses are moving their computing operations to the cloud. Amazon Web Services or AWS is the biggest player there.
A few investors have been worried that increasing competition from other cloud providers such as Microsoft and price incentives offered by AWS will slow down the momentum of Amazon. Some investors were also worried about the huge investments the business has made in recent times. But in the end, these fears were proved to be unfounded, at least in this quarter. They did not have any impact on the bottom lines.
Colin Sebastian, an analyst at Baird Equity Research says, “The core e-commerce segment remains very healthy. Subscription services and advertising are growing much faster, and beginning to move the needle, which also helps increase profit margins”.