Amazon has shrugged off competition from fast-growing Chinese rivals to post its strongest-ever start to the year.
The tech giant posted profits of $10.4bn (£8.3bn) in the first three months of 2024, up from $3.2bn during the same period last year.
This came despite the growing threat from China’s online retail giants such as Shein and Temu.
The latest jump in profits stemmed from revenues surging 13pc to $143.3bn in the first quarter, driven by strong retail sales in North America and rapid growth across its digital infrastructure division, Amazon Web Services (AWS).
Amazon hailed surging demand for its artificial intelligence (AI) services, which fall under its AWS arm.
Bosses now expect the AWS division to post more than $100bn in turnover across this year as a whole.
Shares briefly jumped more than 6pc following the trading update before dropping back to around 2pc.
The results, posted on Tuesday night, come as Amazon executives increasingly focus their attention on competition from Chinese shopping sites.
Temu, which is owned by China’s PDD, has rapidly grown to tens of millions of monthly shoppers, who have been drawn in by its bargain prices and the tagline “shop like a billionaire”.
The Wall Street Journal reported last month that Temu had more than 50m US shoppers on its app despite launching just over a year ago.
Andy Jassy, Amazon’s chief executive, said the company plans to focus on its online stores division by continuing to “expand selection, provide everyday low prices, and accelerate delivery speed”.
While facing new competition in retail, Amazon is also racing against other technology giants to develop AI tools amid a boom of interest.
On Tuesday, it unveiled a new AI-powered app development product that would allow non-technical users to build their own smartphone applications without any coding experience.
The tech giant has also invested billions of dollars in Anthropic, which is developing an AI chatbot that rivals OpenAI’s ChatGPT. It also hosts multiple AI tools from other companies through its AWS division.
Separately, Amazon reported that its physical stores division brought in revenues of $5.2bn in the first quarter, up 6.3pc on the previous year.
The sales boost comes as Amazon winds back its “just walk out” checkout technology across some of its US stores.
The tech giant’s shares are up 16pc this year on the back of a stock market rally thanks to optimism relating to AI technology.
Shares in rival Google, which competes with Amazon’s web infrastructure division, are up around 18pc so far in 2024 while Meta’s stock is up 24pc.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
