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Will Amazon's (AMZN) Q2 Earnings Benefit From AWS Momentum?
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Amazon’s (AMZN - Free Report) second-quarter 2023 results, scheduled to be released on Aug 3, are likely to reflect gains from its strengthening cloud service offerings.
The cloud computing division, Amazon Web Services (AWS), dominates the cloud market on the back of its growing adoption and popularity. This is anticipated to be reflected in the company’s second-quarter results.
We note that the solid momentum across AWS has been aiding Amazon in generating high margins from the cloud business. The trend is expected to have continued in the yet-to-be-reported quarter.
AWS revenues were $21.3 billion, accounting for 17% of net sales in first-quarter 2023, rising 16% year over year. We further note that AWS’s operating income was $5.1 billion.
An expanding customer base and a strong discount offering for long-term deals are likely to have driven AWS’s top line in the quarter under review.
The Zacks Consensus Estimate for second-quarter 2023 AWS net sales is pegged at $21.49 billion, indicating an improvement of 8.9% from the year-ago quarter’s reported figure.
Click here to know how the company’s overall second-quarter results are likely to be.
The expanding cloud services portfolio of AWS and strengthening data center network are likely to have contributed well to driving the company’s customer momentum during the second quarter.
The increasing number of AWS regions and availability zones might have remained a positive.
In the quarter under review, AWS was selected by Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). BBVA leverages AWS to accelerate its data-driven transformation.
Veriff teamed up with AWS to reinforce its IT infrastructure to stay alert for fraudulent attacks. It is also leveraging the machine learning capabilities of AWS to accelerate the development of new identity verification solutions for various sectors.
AWS was also picked by Experian as the preferred cloud provider. With the aid of AWS’ robust portfolio of cloud technologies and global infrastructure, Experian intends to shift its core business operations, consumer-services products, analytic tools and on-premises servers to AWS to support its multi-year information technology modernization initiative.
AWS was picked by Southwest Airlines as the preferred cloud provider to boost its digital transformation efforts, deliver a responsive customer support experience, streamline its operations and unveil advanced digital solutions on the heels of AWS solutions.
One of AWS’ existing customers, namely Old Mutual, completed migrating its entire information technology infrastructure, including banking, insurance and wealth management systems, to AWS.
Siam Cement Group and PTT Global Chemical Public Company selected AWS as their preferred cloud provider.
KB Kookmin Bank collaborated with AWS to power its Star Banking super-app with the latter’s wide range of services.
We note that the strengthening customer base is likely to have driven AWS's top-line growth in the second quarter.
Zacks Rank & Stocks to Consider
Currently, Amazon has a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , AvidXchange (AVDX - Free Report) and Akamai Technologies (AKAM - Free Report) . Salesforce and AvidXchange each sport a Zacks Rank #1 (Strong Buy) and Akamai Technologies carries a Zacks Rank #2.
Image: Bigstock
Will Amazon's (AMZN) Q2 Earnings Benefit From AWS Momentum?
Amazon’s (AMZN - Free Report) second-quarter 2023 results, scheduled to be released on Aug 3, are likely to reflect gains from its strengthening cloud service offerings.
The cloud computing division, Amazon Web Services (AWS), dominates the cloud market on the back of its growing adoption and popularity. This is anticipated to be reflected in the company’s second-quarter results.
We note that the solid momentum across AWS has been aiding Amazon in generating high margins from the cloud business. The trend is expected to have continued in the yet-to-be-reported quarter.
AWS revenues were $21.3 billion, accounting for 17% of net sales in first-quarter 2023, rising 16% year over year. We further note that AWS’s operating income was $5.1 billion.
An expanding customer base and a strong discount offering for long-term deals are likely to have driven AWS’s top line in the quarter under review.
The Zacks Consensus Estimate for second-quarter 2023 AWS net sales is pegged at $21.49 billion, indicating an improvement of 8.9% from the year-ago quarter’s reported figure.
Click here to know how the company’s overall second-quarter results are likely to be.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. revenue-ttm | Amazon.com, Inc. Quote
Factors to Note
The expanding cloud services portfolio of AWS and strengthening data center network are likely to have contributed well to driving the company’s customer momentum during the second quarter.
The increasing number of AWS regions and availability zones might have remained a positive.
In the quarter under review, AWS was selected by Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). BBVA leverages AWS to accelerate its data-driven transformation.
Veriff teamed up with AWS to reinforce its IT infrastructure to stay alert for fraudulent attacks. It is also leveraging the machine learning capabilities of AWS to accelerate the development of new identity verification solutions for various sectors.
AWS was also picked by Experian as the preferred cloud provider. With the aid of AWS’ robust portfolio of cloud technologies and global infrastructure, Experian intends to shift its core business operations, consumer-services products, analytic tools and on-premises servers to AWS to support its multi-year information technology modernization initiative.
AWS was picked by Southwest Airlines as the preferred cloud provider to boost its digital transformation efforts, deliver a responsive customer support experience, streamline its operations and unveil advanced digital solutions on the heels of AWS solutions.
One of AWS’ existing customers, namely Old Mutual, completed migrating its entire information technology infrastructure, including banking, insurance and wealth management systems, to AWS.
Siam Cement Group and PTT Global Chemical Public Company selected AWS as their preferred cloud provider.
KB Kookmin Bank collaborated with AWS to power its Star Banking super-app with the latter’s wide range of services.
We note that the strengthening customer base is likely to have driven AWS's top-line growth in the second quarter.
Zacks Rank & Stocks to Consider
Currently, Amazon has a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , AvidXchange (AVDX - Free Report) and Akamai Technologies (AKAM - Free Report) . Salesforce and AvidXchange each sport a Zacks Rank #1 (Strong Buy) and Akamai Technologies carries a Zacks Rank #2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Salesforce shares have gained 70.7% in the year-to-date period. The long-term earnings growth rate for CRM is currently projected at 19.25%.
AvidXchange shares have increased 21.1% in the year-to-date period. The long-term earnings growth rate for AVDX is currently projected at 22.90%.
Akamai shares have gained 9.5% in the year-to-date period. The long-term earnings growth rate for AKAM is currently projected at 10%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.