The cloud arm of the retail giant, AWS saw a 17 per cent year-on-year growth, boasting sales of $25 billion (€21.3 billion), with $9.4 billion (€8 billion) of that as operating income. This means that a not-so-insignificant 17 per cent of Amazon's total revenue is now clouded in AWS which is raining down 65.7 per cent of the overall group's operating income.
Not to be outdone by mere milestones, AWS has exceeded the $100 billion (€85 billion) annual run-rate mark.
Amazon's Q1 parade was the last to pass by among the big cloud triumvirate. Microsoft had previously reported a cloud revenue growth of 24 per cent, while Google Cloud, the sprightly younger sibling, grew an impressive 28 per cent, albeit from a cozier starting point. Its Q1 earnings were $9.57 billion (€8.1 billion).
Despite the fanfare, Amazon's overall results, while impressive, didn't quite hit the high notes expected, with forecasts tuning around $150 billion. Yet the stock in the retail and tech titan still managed to climb by up to 5 per cent in the after-hours trading soiree.
AWS CEO Andy Jassy said: "Year-over-year percentages are only as telling as the base you begin with. With our behemoth infrastructure cloud computing base, this growth rate has AWS seeing more absolute dollar growth again quarter-over-quarter than anywhere else in the empire.".
The knee-jerk reaction to the cloud giants' higher-than-expected earnings is to tip the hat to GenAI, suggesting that the hefty investments in this sector are starting to bear fruit.
D.A. Davidson & Co analyst Gil Luria said that looking at AWS, Microsoft Azure, and Google Cloud, it's evident that two phenomena were occurring in tandem – AI is fuelling growth, and the rest of cloud spending is picking up pace.
The financial belt-tightening that followed the cloud's meteoric rise during the pandemic seems to be loosening.
Yet, AI's role in driving cloud growth remains undeniable. AI services have contributed a seven per cent growth to Azure, a step up from 6 percentage points in the previous quarter.