Following its highly anticipated earnings report that debuted Thursday, Amazon (AMZN) stock is up as much as 7% as AI growth is driving the surge. The earnings call provided a clear opportunity for the firm to discuss the positive trajectory for some of its most important businesses. Ultimately, spurning Wall Street to respond positively over its prospects.
During the call, CEO Andy Jassy noted that its AI business is growing a remarkable three times faster than Amazon Web Services (AWS) while at similar development points. Considering the incredible success that AWS—the company’s cloud-based computing business—has had, traders appeared immensely optimistic about its future.
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Amazon Gets Massive Boost From Q3 Earnings as Investors Show Belief in AI
One of the most promising stocks heading into 2024 was easily Amazon. Not only is the company an e-commerce tycoon, but it has also shown tremendous progress in both AI and cloud computing. The two areas have emerged as favorites for investors, with the information technology sector planning $200 billion in investment into the former throughout 2024.
Yet, the success of the online shopping platform has driven even more success for its stock. Indeed, Amazon (AMZN) is up as much as 7% as its Q3 earnings report showcased tremendous AI growth. Now, the stock is nearing the $200 level, with increases bound to be on the horizon.
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The report’s results led many analysts to increase price targets for the company, as they outperformed consensus expectations. Additionally, the company noted that it is expecting an increase in capital expenditure in 2024. Most of those funds will be directed to technological infrastructure for its burgeoning AI growth.
JPMorgan analysts said they were “comfortable” with Amazon’s spending considering its results. Moreover, they note the company’s “very clear path to AI monetization through AWS,” while raising their price target to $250. The report noted that Cloud revenue had increased 19% year-over-year to surpass the $27 billion mark.
