Amazon (AMZN) recently reported its second quarter results that outpaced market expectations. During the quarter, Amazon continued to add several enhancements to its platform that leverage generative AI capabilities.

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Amazon’s Financials

Amazon’s second quarter revenues grew 10.8% to $134.4 billion, ahead of the market’s forecast of $131.5 billion. Net income of $0.65 per share was significantly higher than the Street’s forecast of $0.35 per share.

During the quarter, Amazon Web Services grew 12% to $22.1 billion, falling short of the $21.8 billion expected by the market. Advertising revenues grew 22% to $10.7 billion, ahead of the market’s forecast of $10.4 billion.

Amazon expects its third quarter revenues in the range of $138-$143 billion, compared with the market’s estimate of $128.32 billion.

Amazon’s AI Focus

Amazon has been bitten by the genAI bug as well. During the quarterly call, the management announced that Amazon is building genAI tools into each one of their departments. Unlike other companies that are looking to leverage AI capabilities for end user products, Amazon is also focusing on back end applications of the tech, such as at the compute layer to train foundational models for generative AI programs. It already has access to a trove of data as AWS provides services and infrastructure that can help train AI models to power the apps. For instance, for the developers, AWS CodeWhisperer system will help accelerate development by suggesting pieces of code that can be used directly in the code editor.

These new AWS technologies and capabilities that were driven by the addition of Cohere as a foundation model provider and that leverage new models from Anthropic and Stability AI, making it easier for developers to create genAI based applications to complete complex tasks and deliver customized up-to-date answers based on data.

Amazon appears to be playing a very strategic game for AI. Rather than releasing a single product or a large language model, it wants to enable companies building with genAI to create any product using any model. Amazon is hoping to supply the tools and the computing power to developers to build AI apps, and it will surely make its money as they build.

Its stock is trading at $140.14 with a market capitalization of $1.45 trillion. It touched a 52-week high of $146.57 in August last year. It had fallen to a 52-week low of $81.43 in December last year.

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