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As stores reopen and in-person shopping picks up, the increase in demand for shopping on Amazon has finally started to decline – no. many, to be clear, but just enough to frustrate investors.
From April to June, Amazon reported $ 113.1 billion in product and service sales, up 27% year-over-year. That’s a huge amount of money, but investors were hoping for a little more, around $ 115 billion, and Amazon shares have fallen since the numbers were released in its second quarter 2021 earnings report this post. midday.
But there was one place investors are happy to see, and it helps explain the company’s recent executive reshuffle. Amazon Web Services achieved $ 14.8 billion in net sales, up 37% year-over-year. This substantial growth surpassed that of Amazon as a whole and that of AWS in the second quarter, where it had increased by 29%. This was the one bright spot about the business that Andy Jassy, Amazon’s new CEO, found worthy of mention in his remarks accompanying the post, stating “we’ve seen the growth of AWS s ‘speed up again “.
Jassy was in charge of AWS until July 5, when he was elevated to CEO to replace Jeff Bezos, who left to eat Skittles in space. The cloud division has always been a powerhouse for Amazon, accounting for most of the company’s operating revenue. While its growth had slowed during the pandemic, the division now appears, as Jassy said, to be accelerating again.
As for the rest of Amazon, investor concern over a company that made just $ 113.1 billion in three months can come from two places. On the one hand, Amazon grew much faster last year – it saw a 40% growth in net sales this time in 2020, up from 27% this year – although it may be recalled that a certain global pandemic was developing during these months, encouraging an online shopping boom. But second, the other tech giants have done quite well this quarter, exceeding investor expectations, making Amazon the intruder.
Prime Day also took place in June of this year, which likely helped push those numbers up. Amazon said 250 million items had been purchased, more than any previous Prime Day.
There have been signs that the growth of online shopping as a whole is starting to slow. Growth is always growth, but that means Amazon and its investors cannot expect gains as huge as those that occurred in 2020, as much of the world has tried to avoid buying in. interior.
Jassy has given no indication of how he would run the business differently from Bezos, but today’s numbers help show why he is in charge. AWS remains a glimmer of hope and its leader must now take care of the rest of Amazon.
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