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  • Writer's pictureRealFacts Editorial Team

Amazon Gains on Strong Earnings Report


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Amazon stock saw gains in Wednesday trading following the release of its first-quarter earnings report. The E-commerce giant reported sales and earnings that surpassed expectations, with earnings per share reaching 98 cents on sales of $143.3 billion, marking a 13% year-over-year increase. Analysts had anticipated earnings of 84 cents per share on sales of $142.7 billion. Amazon's cloud-computing division also performed well with sales growing 17% year over year to $25 billion. However, the company provided a lighter-than-expected sales forecast for the June quarter, guiding for sales between $144 billion and $149 billion, below analysts' expectations of $150.12 billion.

 

Similar to other tech giants, Amazon highlighted significant capital spending aimed at enhancing its artificial intelligence capabilities. Unlike some of the other Magnificent Seven, Amazon did not announce the dividend that some investors had been anticipating. During a segment of Bloomberg Markets: During "The Close," Eric Clark, Portfolio Manager at Accuvest Global Advisors, offered his insights on Amazon's future trajectory and shared his perspective on the absence of a dividend announcement. He said, “I have no doubt that Amazon will be the first company with 1 trillion or more in annual revenue.” He later went on to say, “There are other areas that Amazon needs to put their cash right now, rather than in my opinion back into a dividend.” These areas include allocating cash towards revitalizing its cloud business, as well as bolstering its AI business to catch up with other large-cap tech companies in the industry. Clark holds a bullish outlook on Amazon's future, expressing confidence that the company will sustain growth both in terms of revenue and profitability.

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