Amazon's stock surges as profit jumps and sales jump

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Amazon (AMZN)'s sales boomed on strong demand in the second quarter for its wide range of products, from Prime deals to ads, fueling a massive jump in profit from a year ago.

Sales grew 11% to $134.4 billion. That's an increase from $121.2 billion in the second quarter of 2022. The number exceeded analyst predictions of $131.4 billion revenue. p

The stock surged 7% in after-hours trading.

The company's profit jumped sharply compared to this quarter last year. Its net income was $6.7 billion in the second quarter, compared to a net loss of $2 billion in second quarter 2022. It soared past Refinitiv analyst predictions of a $3.592 billion in earnings.

Investors were closely watching customer spending in both the cloud and retail markets.

Amazon Web Services has long been a cash cow for the company. Last quarter, that segment's sales rose 16% after a period of slowed growth as cloud users worried about the economy's health. This quarter's AWS sales increased 12%, a small slowdown.

In a statement, CEO Andy Jassy said "a slew of generative AI releases" has allowed its cloud business to remain a leader, competing with the likes of Google (GOOG) and Microsoft (MSFT). Jassy also added its AWS growth has "stabilized."

Though a big bet on AI hasn't translated into faster gains for AWS yet, the tech giant is optimistic about its future, experimenting with the e-commerce shopping experience as well. It's working to use AI to sum up customer feedback about products on the site.

Amazon also attributed its strong quarter to fast delivery speeds.

Jassy added there is continued "strong demand" for its advertising services. Its ad business jumped 22% to $10.7 billion, a positive sign for the digital ad market.

"We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we've ever recorded," Jassy said in the statement.

Amazon said it expects its third-quarter sales to grow between 9% and 13% compared to the previous year's quarter.