8 months ago • 2 mins
What’s going on here?
Amazon’s impressive results had investors reaching for their wallets late on Thursday.
What does this mean?Amazon's businesses were all systems go last quarter. Faster and more efficient logistics helped drive strong e-commerce revenue growth, in a win for the behemoth’s biggest segment. And its high-flying cloud business kept the momentum going, with sales rising by 16% from the same time last year – the fifth straight quarter that metric's slowed, sure, but still ahead of expectations. Add in an advertising surge – thanks in part to ramped-up investments in machine learning – and it’s little wonder that overall revenue grew by a better-than-anticipated 9%. Once investors learned that operating expenses crept up by the smallest proportion in over ten years, they’d heard enough, sending shares up 8%.
Why should I care?
The bigger picture: Clouding the issue.
Corporate belt-tightening is raining on Amazon's cloud parade, and the firm's wonder-segment is now shedding the most weight in the latest round of layoffs. And there might be even more rain coming soon: Amazon and Microsoft dominate the market, controlling as much as 70% of the cloud industry by some estimates – and that’s got British regulators sniffing around. Plus, those very authorities showed they’re not afraid to act earlier this week, putting the kibosh on Microsoft’s Activision purchase. With regulators taking potshots like that, the cloud might be next in the firing line.
Zooming out: Jewel in the crown.
Amazon’s new big plan involves diving into the world of lab-grown gems, with the help of diamond miner de Beers – in a bet that the shiny things are poised to revolutionize computer networks. The ultimate goal is to harness tailor-made diamonds for quantum computing, an emerging technology that could transform data security. And let’s not forget: diamonds are forever, so putting a ring on the finger of cloud computing might help keep Amazon’s trailing rivals at bay.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
/3 • Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.