Amazon’s (NASDAQ:AMZN) second-quarter revenue surpassed expectations, as the conglomerate’s cloud unit Amazon Web Services (AWS) performed very well in Q2. AMZN stock is jumping 12.5% in early trading.
The conglomerate’s Q2 revenue increased 7.2% year-over-year (YOY) to $121.2 billion versus analysts’ average outlook of $118.8 billion. Excluding a pre-tax valuation loss of $3.9 billion on an investment, the company’s net income came in at roughly $1.9 billion.
Turning to guidance, Amazon expects to generate Q3 revenue of $125 billion to $130 billion versus analysts’ mean estimate of $126.6 billion.
“Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network. We’re also seeing revenue accelerate as we continue to make Prime even better for members,” Amazon CEO Andy Jassy said in a statement.
The revenue of AWS jumped 33% YOY to $19.74 billion. The unit’s operating income rose to $5.7 billion from $4.2 billion during the same period a year earlier.
Analysts Were Bullish on AMZN Stock Results
Wedbush’s Michael Pachter kept a “buy” rating and a $175 price target on AMZN stock.
“Despite inflationary pressures, a tight labor environment, and suboptimal fixed cost leverage, Amazon delivered strong second quarter results that benefited from elevated levels of consumer demand and better optimization of its fulfillment Network,” Pachter wrote. He added, “Longer-term, Amazon should benefit from steady margin expansion driven by the rapid growth of its cloud and advertisement businesses.”
Also upbeat was UBS’ Lloyd Walmsley, who hiked his price target on the shares to $180 from $167. Walmsley was bullish on the company’s Q2 results, as he noted that the company’s fulfilment costs and its cost of goods sold came in below his outlook. He kept a “buy” rating on the name.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.