AWS growth climbs to 28% as Amazon’s big AI bets start to pay off

Amazon Web Services growth accelerated to 28% in the first quarter — its fastest pace in nearly four years — pushing Amazon’s results past Wall Street’s expectations and validating, at least for now, the company’s controversial $200 billion bet on artificial intelligence infrastructure.

Overall, Amazon posted sales of $181.5 billion, up 17%, and operating income of $23.9 billion, up 30%. Both topped guidance and exceeded Wall Street’s expectations of about $177 billion in revenue.

Profits were $30.3 billion, or $2.78 per diluted share. However, that included a $16.8 billion pre-tax gain on Amazon’s investment in Anthropic, which inflated the bottom-line numbers. Excluding that one-time gain, adjusted earnings per share would have been $1.61, just shy of analyst expectations of $1.62.

Amazon’s advertising business grew 24% to $17.2 billion in the quarter, and the company said advertising revenue topped $70 billion over the past 12 months.

In the core e-commerce business, unit sales grew 15%. Amazon CEO Andy Jassy called it the strongest growth rate since the waning days of the COVID-19 lockdowns. It was boosted in part by faster delivery, with more than 1 billion items shipped same-day or overnight in the U.S. so far this year.

Amazon is in “the middle of some of the biggest inflections of our lifetime,” Jassy said in a release.

Shares were down about 2% in initial after-hours trading.