Amazon (AMZN) shares continued to gain ground in late trading on Thursday with the company’s earnings call highlighting the advancements in its cloud computing segment, new features on its ecommerce site, and growth expectations for its ad business.
Chief executive Andy Jassy kicked off the call with the progress on Amazon Web Services and its meteoric growth potential.
“We are focused on accelerating the capacity [of AWS] and expect to double capacity from a projected 4.8 GW by the end of 2027,” Jassy said.
“Another place where we see a lot of growth is in the number of enterprises who have gotten back to moving from on-premises infrastructure to the cloud, and we continue to earn the lion’s share of those transformations…and I continue to believe that we can grow at a clip like this for a while,” he continued.
In the ecommerce space, Jassy is most excited by the reception to its perishable delivery business and the overwhelming adoption of the service.
“We’re onto something significant [in perishable grocery delivery],” Jassy said, and noted that the explosive growth of this category puts Amazon (AMZN) as the third largest grocery business in the country. Amazon (AMZN) plans to offer same-day perishable delivery in 2,300 cities by the end of this year.
The integration of AI in the retail space presents a significant opportunity for Amazon, Jassy says, noting the popularity of the company’s Rufus shopping assistant which added $10B to in incremental sales.
Ahead of its Q3 results, Amazon (AMZN) announced significant corporate job cuts. When asked if the reductions were driven by AI efficiencies or cost considerations, CEO Andy Jassy said they were primarily motivated by culture.
“When you grow as fast as we did over several years, the number of people, the number of locations, you end up with a lot more people than you had before, and a lot more layers. When that happens, sometimes without realizing it you can weaken the ownership of the people doing the actual work.”
So, in order to keep Amazon (AMZN) operating like the world’s largest start-up, “it’s important to be lean, it’s important to be flat, and it’s important to be fast,” Jassy said.
Management ended the call with shares more than 13% higher from Thursday’s close.