Net sales at Amazon in the third quarter ended September 30 rose 11%, to $158.9 billion, and net income rose 54.5%, to $15.3 billion. Both results were above analysts' expectations, leading to a rise in Amazon stock in after-hours trading of 5%, to about $170 a share.
Amazon's North American sales increased 9%, to $95.5 billion, while international sales rose 12%, to $35.9 billion. Sales for Amazon Web Services, Amazon's cloud services division, rose 19%, to $27.5 billion.
Amazon predicted that net sales in the fourth quarter will be between $181.5 billion and $188.5 billion, or up 7%-11%, compared to fourth quarter 2023. Operating income is expected to be between $16 billion and $20 billion, compared to $13.2 billion in fourth quarter 2023.
In a conference call, as reported by Business Insider, Amazon president and CEO Andy Jassy noted that the customer base is "looking for deals" and "price conscious," all of which helped fuel the company's 11% growth in net sales.
CFO Brian Olsavsky added that customers are increasingly buying cheaper household items, like "health, beauty, and personal care as well as nonperishable grocery.... We see that when customers purchase these types of items from us, they build bigger baskets, shop more frequently, and spend more on Amazon."
The company is investing heavily in AI. As the Wall Street Journal wrote, Amazon "plans to spend around $75 billion on [capital expenditures] this year and more next year as part of a push to build generative AI services.
" 'The faster we grow demand, the faster we have to invest capital in data centers, network gear and hardware,' Jassy said on a conference call after results. 'We invest in all that upfront in advance of when we can monetize it.' "
The Journal also noted that Amazon "has created special teams to drive generative AI innovation and has released a flurry of services, including an AI shopping assistant on its app named Rufus. To make way for its AI pivot, Jassy has looked to cut costs in other divisions."