Amazon reported strong first-quarter 2024 profits on Tuesday. AI and advertising sales drove revenues up.

The multinational technology firm announced first-quarter sales of $143.3 billion, up 13% from 2023 and exceeding Wall Street projections of $142.65 billion, as reported by The Guardian. The e-commerce giant's earnings rose over 200% to $15 billion, while net income tripled to $10.4 billion from $3.17 billion in 2023.

AI-Powered Growth

Andy Jassy, Amazon's CEO, acknowledged AI as key to Amazon Web Services (AWS) sales growth of 17% year-over-year $25 billion and AWS accounted for 62% of operating profit. In a post-report investor call, Jassy stressed the development potential of generative AI.

Despite a recent halt in growth due to the COVID-19 epidemic, AWS revenue increased as firms improved their cloud infrastructure for remote work support. Executives believed this trend would continue, and they expected AI demand to boost cloud services.

Jassy stressed the need for further infrastructure expenditure to support Amazon's cloud computing and AI efforts. Capex was $14 billion for the quarter, with forecasts of higher quarterly rises.

Investors' positive response to Amazon's cost-cutting actions, including massive layoffs since late 2022, shows their effectiveness. Shares rose 5% just hours after the results were released.

This strong result followed Amazon's $11 billion investment in Indiana data centers to create at least 1,000 jobs. The firm also extended its agreement with Nvidia to power its AI solutions, strengthening its technical position.

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Moreover, advertising revenue in the first quarter of 2024 helped Amazon beat sales and profit predictions. Due to Amazon Prime ads, the internet giant's advertising income rose 24% year-over-year to $11.8 billion, according to the BBC.

Making Amazon Prime Ads the default option for many users drove advertising revenue growth. Its promptest Prime delivery speeds and strong cloud service performance boosted the outcomes. However, unions and employee organizations worry about Amazon's speedier delivery goal affecting staff well-being.

Nevertheless, CEO Andy Jassy praised the year's great start and expressed hope about the future. 

(Photo : MARCO BERTORELLO/AFP via Getty Images) 

The logo of e-commerce company Amazon is pictured on parcels in Manta, Northwestern Italy, on March 29, 2024.

Confidence in Amazon's AI Efforts 

TechTimes previously reported that in Amazon's recent annual shareholder letter, the online retail giant addressed shareholder concerns, including its AI race posture.

In the letter, Amazon CEO Andy Jassy voiced confidence in the company's AI progress, despite market and customer impressions that the company is creeping behind the AI race.

Jassy believes that AWS, the company's cloud computing subsidiary that powers many digital enterprises globally, will lead to substantial revolutionary AI developments.

The Amazon top executive explained the company's generative AI approach and dedication to basic AI models in the letter. For these models, he mentioned Siemens, Pfizer, and Delta Air Lines as Amazon's enterprise partners.

Amazon focuses AI technology research above consumer-facing apps to compete with OpenAI's ChatGPT.

Andy Jassy stressed that Amazon develops fundamental models, uses pre-built generative AI programs, and leverages existing ones depending on their needs and expertise. 

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