Investing.com – Shares of Amazon.com, Inc. (NASDAQ:) surged nearly 11% on Friday after the e-commerce giant said growth in its key cloud computing division slowed less-than-expected in the second quarter, raising hopes for a turnaround in the much-maligned unit.
The business, known as Amazon Web Services, posted 12% revenue growth for the period ending June 30. The Bloomberg consensus forecasts growth of 9.48%.
Amazon previously warned that AWS revenue was down to 11% in April from 16% in the first quarter and 29% in 2022, a trend largely blamed on customers trying to cut cloud costs as much as possible. However, Amazon executives noted that generative artificial intelligence has spurred demand to develop new computing workloads.
Check out the key figures from the Amazon report!
“We have a lot of growth ahead of us at AWS,” CEO Andy Jassy said in a phone call with analysts following the release of the results.
Despite Amazon reporting continued economic uncertainty, the company’s online retail sales rose 5%, excluding foreign exchange effects, to $53 billion, better than expected.
This increase, combined with recent cost cuts, which included a sharp headcount cut, boosted earnings per share to $0.65 and total revenue to $134.4 billion, higher than forecast.
Analysts at Rosenblatt upgraded their rating on Amazon to Buy from Neutral and raised their share price target to $184 from $111, citing a “constructive” earnings report.
“As the business restarts, with efficiency becoming the new focus for retail and AI becoming the driving force in the cloud, the risk of impending economic headwinds looks less of an issue, opening the door to more growth from multiple consumers,” Rosenblatt analysts said.
*Editor’s note: The previous version erroneously indicated that the target price had been raised to 1 billion euros. The information has been corrected in the current version. We apologize to our audience.