Amazon posted surging profits and sales that exceeded expectations on Wall Street off the back of strong festive trading and growth in its cloud computing arm.

Amazon warehouse

Amazon reported sales up 14% year on year in the three months to December

The world’s largest retailer reported sales of $170bn (£133.3bn) alone in the three months to December, up 14% on the same period in 2022 and well ahead of the expected $166bn (£130.2bn) predicted by analysts.

Net income hit $10.6bn (£8.3bn), up from just $278m (£218m) the previous year, as the retail giant moved to slash costs and brought to an end years of rapid expansion following the pandemic.

Amazon cut 27,000 jobs across the globe last year and the layoffs have continued in 2024, albeit at a slower pace.

The company also reported that its Amazon Web Services (AWS) arm had eaten into Microsoft’s lead in the cloud computing market and announced it would integrate its AI shopping assistant Rufus into its app.

Revenue at AWS increased by 13% to $24.2bn (£18.9bn) in the period, while sales generated by the division climbed 27% to $14.7bn (£11.5bn).

Chief executive Andy Jassy said: “This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon.

“While we made meaningful revenue, operating income and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses.

“The regionalisation of our US fulfillment network led to our fastest-ever delivery speeds for Prime members while also lowering our cost to serve; AWS’ continued long-term focus on customers and feature delivery, coupled with new GenAI capabilities like Bedrock, Q and Trainium have resonated with customers and are starting to be reflected in our overall results; our advertising services continue to improve and drive positive results; our newer businesses are progressing nicely and, along with our more established businesses, collectively making customers’ lives easier and better every day.

“As we enter 2024, our teams are delivering at a rapid clip and we have a lot in front of us to be excited about.”