Amazon Records Profit Surge as Capex Outpaces Earnings Growth
AMZN•Amazon's latest quarter delivered record profits thanks to accelerating AWS cloud growth. Capital expenditures rose even faster, driven by heavy infrastructure investments in data centers and logistics, potentially weighing on free cash flow.
1. Record Profit Driven by AWS Growth
Amazon posted record quarterly profits driven by accelerating AWS cloud revenue growth, with enterprise clients increasing usage of computing, storage, and machine learning services.
2. Capital Expenditures Surge Beyond Earnings
Capital expenditures rose even faster than earnings, as the company invested heavily in new data centers, fulfillment center expansions, and advanced logistics technologies to support long-term growth.
3. Plans to Acquire Globalstar
Amazon announced plans to acquire satellite communications company Globalstar, aiming to bolster its connectivity offerings and expand its cloud infrastructure footprint globally.
4. Associates Program Restructuring Backlash
Recent restructuring of the Amazon Associates affiliate program slashed commission rates, triggering backlash from partners facing lower revenue and raising concerns about the program’s competitiveness.
