Amazon announced a 17% yearly increase in revenue from its cloud computing unit Amazon Web Services (AWS) for the first quarter of this year. This figure surpassed analyst expectations, with AWS generating $25.04 billion compared to predictions of $24.49 billion by Wall Street experts surveyed by StreetAccount. The growth rate is a notable increase from the 13% expansion reported in Q4 last year for AWS revenue.
AWS now accounts for approximately 17% of Amazon’s overall revenues, which reached $143.313 billion during this period. While primarily known as an online retailer, Amazon has become a significant player within the information technology industry by providing computing resources, database software and networking services to large corporations, startups, and governments through AWS.
AWS is also an incredibly profitable area for Amazon thanks to its high-margin software offerings. In Q1 2022, AWS generated $9.42 billion in operating income which amounts to around 62% of Amazon’s overall profitability during this period. Analyst predictions by StreetAccount suggested that the figure would be closer to $7.52 billion for AWS-specific profits during Q1. Furthermore, AWS’s operating margin widened significantly from previous quarters and now stands at a remarkable 37.6%, representing the highest point in this metric since around mid-decade.
The cloud computing industry is growing more rapidly than other areas of information technology such as devices or data center systems according to Gartner, an established researcher within the sector. Last week both Google and Microsoft reported impressive growth figures for their respective cloud services. However, Amazon remains by far the largest player in this market segment.
During Q1 2022, AWS announced a $4 billion investment into startup Anthropic which is relying on its own chips to facilitate training AI models with notable success in specific areas where they lead over their rivals according to Adam Selipsky, CEO of AWS who spoke about the matter during an interview with Axios. Google and Microsoft’s cloud-based services also provide AI solutions for clients, as does OpenAI which is backed by Microsoft.
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