Amazon's first quarter report is released, and online sales growth stagnates

Amazon released its first quarter financial report early this morning, and data showed that its net profit in the first quarter reached $3.17 billion, higher than the $2.24 billion previously predicted by industry analysts. After the financial report was released, Amazon's stock price also soared.

However, despite the results that beat expectations, Amazon said its cloud computing division's revenue grew 16% in the first quarter, far lower than the 37% growth the division achieved in the same period last year.

Overall, Amazon's revenue in the first quarter of this year has improved significantly compared to the same period last year. In addition, other technology giants such as Meta and Microsoft have achieved revenue that exceeded expectations in the first quarter.

In fact, before the first quarter financial report was released, the market seemed to be quite optimistic about Amazon's future development prospects. So far this year, Amazon's stock price has rebounded nearly 31% from its low point.

"There is so much to admire about the way our teams are serving customers, especially during this economic uncertainty," Amazon CEO Andy Jassy said in a statement.

Jassy also added that Amazon's advertising revenue grew 23% year-over-year to $9.51 billion, thanks to the company's investments in machine learning.

In addition, although business customers have become "more cautious" in spending on cloud services , Amazon's storage and machine learning services will provide "huge growth potential" in the future.

Earlier this month, Amazon warned that consumers were becoming more cautious about their spending and would take advantage of any opportunity to save money.

Most importantly, many consumers have now begun to return to offline stores to shop. This should be the main reason why Amazon's online sales did not grow in the first quarter.

Based on this, Amazon has canceled some warehouse expansion plans. In the past two quarters, cost reduction and efficiency improvement have been the main theme of Amazon, and the number of layoffs in various departments has reached the largest scale in history.

Amazon even plans to suspend the second phase of its headquarters in northern Virginia and close some Amazon Fresh and Go convenience stores, which shows that its current financial situation is really stretched.

Although Amazon's net profit in the first quarter exceeded expectations, the stagnation of online sales growth is obviously not good news for sellers. If this situation continues, the internal competition among sellers may intensify in the future.

Amazon

Financial Report

First quarter