Amazon Reports Record-Breaking Fourth Quarter Revenue and Profits

Seattle-based e-commerce giant, Amazon, announced on Thursday that it had surpassed expectations with its revenue and profits for the fourth quarter of 2023. The company reported $170 billion in revenue and $10.6 billion in profits, outperforming analysts' predictions. Amazon CEO, Andy Jassy, described it as a “record-breaking” holiday shopping season for the company.

Comparing the figures to the same period in 2022, Amazon had generated $149.2 billion in revenue and $300 million in profits. However, the lower profits in 2022 were primarily due to a write-down of the value of its stock investment in electric vehicle startup, Rivian Automotive.

Despite concerns over increasing credit card debt and delinquencies, as well as rising prices and borrowing costs, consumer spending in the United States saw a boost in November and December. This upward trend followed a slight decline in October after six consecutive months of growth. Amazon, like other retailers, capitalized on this by offering fast shipping and discount events to attract holiday shoppers. In October, the company held a prominent sales event exclusively for Prime members.

During the fourth quarter, Amazon's online retail business generated $70.5 billion in revenue, representing a 9% increase compared to the same period in 2022 when it earned $64.53 billion. Additionally, the company's cloud computing unit, Amazon Web Services (AWS), earned $24.2 billion.

One area of particular focus for Amazon is generative artificial intelligence (AI). Initially, the company appeared to be lagging behind in the AI arms race ignited by San Francisco startup OpenAI's release of ChatGPT in late 2022. However, Amazon has since made significant investments to capitalize on the growing interest in AI tools among the public and businesses.

Just before announcing its earnings, Amazon unveiled a new generative AI-powered shopping assistant named Rufus. This AI assistant aims to answer customer questions about products and help them discover new items. Additionally, Amazon has integrated AI-generated summaries of product reviews into its online shopping site.

Following the news of its impressive earnings, Amazon's stock surged by 4% in after-hours trading. The company's continued success in revenue and profits, coupled with its advancements in AI technology, solidify its position as a leader in the e-commerce industry.