Shares in online shopping giant Amazon surged after it became the latest tech giant to smash Wall Street forecasts.
The world’s biggest online retailer posted sales of £102billion for the first three months of the year, 9 per cent higher than in 2022 and above the £100billion predicted by analysts.
Amazon also swung to a £2.6billion quarterly profit having made a £3billion loss in the same period of 2022 as its dominance of the online shopping staved off declines caused by a downturn in consumer sentiment amid the cost of living squeeze.
‘There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,’ said Amazon boss Andy Jassy.
Amazon posted sales of £102bn for the first three months of the year, 9% higher than in 2022 and above the £100bn predicted by analysts
The shares surged as much as 10 per cent in after-hours trading on Wall Street, taking the stock to its highest level in six months but still around 18 per cent lower than the same time last year.
The cloud computing arm, Amazon Web Services (AWS), saw profits fall to £4.1billion from £5.2billion as companies cut back on software amid fears about the health of the global economy.
Despite this, Jassy said: ‘We like the fundamentals we’re seeing in AWS, and believe there’s much growth ahead.’
The figures followed results this week from rival tech giants including Google owner Alphabet and Microsoft.
Both firms defied concerns of a slowdown in the cloud computing market, with Google Cloud clocking up its first-ever profit.
The Amazon figures rounded off a busy and mostly positive week of earnings for Big Tech, which marked a change in fortunes for the sector.
Share prices faced a drubbing for much of last year as growth prospects were hit by rising interest rates and economic gloom.
But tech stocks have bounced back. Meta, the owner of Facebook, posted its first sales increase in 12 months this week while both Microsoft and Alphabet topped estimates.
Analysts were also keeping a close eye on Amazon’s costs, with the firm in the middle of a job-cutting programme that is expected to see another 9,000 staff axed across several business arms including AWS and its streaming platform Twitch.
That follows the loss of 18,000 in an earlier round of job losses – taking the total to 27,000 in what is the largest downsizing in Amazon’s near-30-year history.
Alphabet is also laying off 12,000 employees worldwide, while Microsoft has let go around 10,000 and Meta has slashed 21,000 jobs.
The raft of cuts comes as many tech firms hired thousands of staff during the pandemic when lockdown measures sparked a boom in demand for communication tech and online delivery.
But with the relaxation of restrictions and rising inflation, many have been forced to rein in spending.
The mass lay-offs, however, have not been cheap with Meta revealing a £917million hit in its first-quarter figures as a result of the restructuring.
Last week, it was also reported the company was planning to axe more than 10 per cent of its UK workforce and close the London office of its photo-sharing app Instagram despite having only opened the branch less than a year ago.
Social media firms including Meta have been dented by rising competition from TikTok, the video app owned by Chinese firm Bytedance, while lower business spending on advertising and cloud computing has weighed on the likes of Alphabet, Microsoft and Amazon.
…but £70m loss for Snapchat boss
Slump: Snap boss Evan Spiegel is married to model Miranda Kerr
The boss of Snap had more than £70million wiped off his fortune as shares in the social media firm crashed.
Evan Spiegel, who helped set up the messaging app in 2011 and is married to model Miranda Kerr, suffered the losses after disappointing results last night.
Snap, which owns photo messaging app Snapchat, said revenue for the first three months of 2023 was £797million, short of the £840million expected.
It lost £265million. Shares fell more than 20 per cent, meaning Spiegel’s 3 per cent stake took a big hit.
