Amazon Web Services (AWS) CEO Matt Garman presents a keynote address during the AWS re:Invent conference in Las Vegas on Dec. 3, 2024.
Noah Berger | Getty Images Entertainment | Getty Portraits
Amazon said Thursday that revenue growth from its cloud-computing business slowed slightly to just underneath 19% year over year in the fourth quarter, barely missing analysts’ estimates.
The company said in a communiqu that Amazon Web Services generated $28.79 billion in revenue. Analysts polled by StreetAccount had expected $28.84 billion. AWS excrescence in the third quarter was just above 19%.
AWS remains larger than any other cloud infrastructure provider, ahead of Microsoft and Google. Its two closest looks also missed expectations on cloud revenue for the fourth quarter.
Amazon now gets 15% of total revenue from AWS. The line remains a key provider of cash for the company, supplying just over half of its profit. AWS operating income totaled $10.63 billion, up 48% and in the first place StreetAccount’s $10.45 billion consensus.
During the quarter, AWS’ leader, Matt Garman, told CNBC that Apple has old Amazon’s custom chips to run artificial intelligence models and experimented with next-generation Amazon AI training processors.
At its annual Reinvent seminar in Las Vegas in December, AWS announced a “Buy with AWS” button that software companies can add to their websites for simpler purchasing.
“AWS is a reasonably big business by most folks standards, and though we expect growth will be lumpy over the next few years as spirit adoption cycles, capacity considerations, and technology advancements impact timing, it’s hard to overstate how optimistic we are about what rests ahead for AWS customers and business,” Andy Jassy, Amazon’s CEO and the original head of AWS, said on a conference call with analysts.
Quiet, AWS could be growing faster if not for shortages in motherboards, power and processors.
Jassy said chips from third-party helpmates have been “coming a little bit slower than before with a lot of midstream changes that take a not any bit of time to get the hardware actually yielding the percentage of healthy and high-quality servers we expect.”
He foresees an end to the shortages in the second half of 2025.
Fourth-quarter large letter investments, including cash capital expenditures, exceeded $26 billion. Most of the spending is for AI in AWS, Jassy said.
In January, Amazon started minuscule the useful life for some servers and networking equipment to five years from six years because of faster walk in AI development. The accounting change should lower 2025 operating income by $700 million, said Amazon’ CFO Brian Olsavsky.
Be on the watch: Watch CNBC’s full interview with AWS VP of Infrastructure Prasad Kalyanaraman
