How did AMZN's Q1 2024 earnings surprise the market?

Amazon's Q1 2024 earnings report exceeded market expectations in several key areas, reflecting the company's strong financial performance and growth drivers: 1. **Revenue and Profitability**: - Amazon reported a net income of $10.43 billion, or 98 cents per share, for Q1 2024. This exceeded market expectations and represented a significant year-over-year increase, with net income more than tripling from the $3.17 billion reported in the same quarter of the previous year. - The company’s adjusted bottom-line figure was $1.13 per share, surpassing the Zacks Consensus Estimate by 36.1%. - Total revenue for the quarter was $143.31 billion, marking a 13% year-over-year increase. This growth was driven by solid momentum across North America and International segments, as well as strong contributions from the Amazon Web Services (AWS) and advertising businesses. 2. **Segment Performance**: - AWS, which is a critical growth driver, saw its segment sales rise by 17% year-over-year to $25 billion. This acceleration in growth was attributed to new AI features and infrastructure modernization efforts by companies. - The advertising business also experienced significant growth, contributing to Amazon's overall revenue and profitability. - Product sales, which accounted for 42.5% of total sales, increased by 6.9% year-over-year to $60.9 billion. Service sales, comprising 57.5% of total sales, rose by 17.1% to $82.4 billion. 3. **Market Outperformance**: - Amazon's performance in Q1 2024 marked a significant improvement over the same quarter in the previous year, reflecting enhanced operational efficiency and market positioning. - The company's strong financial results contrasted with the broader market sentiment, with shares underperforming the S&P 500 in the month following the earnings release. 4. **Future Outlook**: - For the current quarter, Amazon projected revenue to range between $144 billion and $149 billion, indicating a growth trajectory consistent with the company's historical performance and market expectations. - Despite slightly conservative projections, Amazon's financial outlook remains positive, supported by ongoing investments in AI and data centers to meet the growing demand for cloud services. In summary, Amazon's Q1 2024 earnings report showcased robust growth across core business segments, particularly AWS and advertising, coupled with improved profitability. These factors collectively contributed to the company's ability to surpass market expectations and maintain a strong market position.