Amazon just revealed revenue growth that was slower than expected. Investors took solace elsewhere.
Because Amazon’s biggest earning centres, cloud computing and advertising, grew rapidly.
Amazon Web Services, which provides cloud computing, storage, and database services, announced sales of $17.37 billion, exceeding analyst expectations. AWS’ $5.29 billion operational profit accounted for over 100% of Amazon’s overall operating profit for the quarter.
Amazon also stunned investors by separating advertising for the first time. Ad revenue increased 32% to $9.7 billion, virtually matching Google’s quarterly growth pace. Since Amazon classified advertisements as “other” company, analysts and investors have been left in the dark.
On Thursday’s “Closing Bell,” Tom Forte, an analyst with D.A. Davidson, said high-margin companies like cloud computing and advertising helped overcome a slowdown in e-commerce. Forte suggests Amazon stock.