Amazon Soars To Record High On Solid Guidance, Improving AWS Results

Amazon's recent earnings report impressed the market, exceeding expectations for EPS and net sales. Cloud growth, specifically AWS, showed significant strength, beating estimates with a 20% year-over-year increase. This AWS performance was the strongest since the end of 2022, driven by AI investments. Despite overall sales beating projections, operating profits for both North America and International segments missed estimates. Fulfillment expenses and seller unit mix were slightly above projections, with potential for further impact from tariffs. Amazon has heavily invested in data centers and chips for AI, with a significant commitment to partner Anthropic. The company's Trainium2 chip is performing well and represents a substantial business. While AWS sales growth was solid, its margin improvement pleased investors. However, consolidated operating margins saw a sequential drop. The stock surged significantly after hours, reaching a new all-time high due to strong revenue and profit guidance. This positive performance now shifts market attention to Apple's upcoming earnings.