Amazon launches AI shopping assistant as holiday shoppers boost revenue
By Catherine Thorbecke, CNN
New York (CNN) — Holiday shoppers powered strong revenue growth for Amazon last quarter, the company said Thursday, the same day it launched a new AI shopping assistant.
The e-commerce leader on Thursday reported revenue of $170 billion for its quarter ending in December, beating Wall Street’s estimates and growing 14% compared to the same period last year.
And the company is now looking to give customers a new way to shop, while signaling to investors that it is doubling down on artificial intelligence. Ahead of the earnings report on Thursday, Amazon announced it was adding an AI-powered shopping assistant dubbed “Rufus” to its e-commerce store.
Rufus is “trained on our very expansive product catalog, as well as our community q&a, and customer reviews, and the broader web,” Amazon CEO Andy Jassy said during a call with analysts. “It lets customers discover items in a very different way than they have been able to on an e-commerce website.”
Rufus launched in beta on Thursday to a small subset of customers on Amazon’s app but will roll out to additional US customers in the coming weeks.
Amazon also reported quarterly profits of some $10.6 billion on Thursday.
Amazon’s profits during this past holiday quarter also come as its business enters 2024 in much better shape than a year ago. At the start of 2023, the company was navigating geopolitical uncertainty, macroeconomic headwinds and higher inflationary pressures as well as a whiplash in pandemic-induced demand for e-commerce. Since late 2022, CEO Jassy has been conducting aggressive cost-cutting measures, including multiple rounds of mass layoffs. Some of the layoffs at Amazon have continued this year.
This past quarter marked “a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon,” Jassy said in a statement accompanying the earnings.
The company’s stock jumped more than 7% in after-hours trading Thursday immediately after reporting earnings.
“The bottom line is that despite all the concerns plaguing the tech sector, Amazon has managed to perform surprisingly well,” Jesse Cohen, senior analyst at Investing.com said in a note Thursday evening. “The results indicate that ongoing cost-cutting measures are having a positive impact on Amazon’s business prospects.”
Amazon Web Services, a longtime money maker for the company, saw revenue climb 13% last quarter to $24.2 billion.
Jassy has also spent the past year signaling to investors that the company is investing heavily in generative AI technology, so as not to be left behind amid an AI arms race in the tech sector. Jassy has said previously that he forecasts generative AI will lead to “tens of billions of dollars of revenue for AWS” in the coming years.
Amazon also said its advertising revenue climbed 27% year-over-year. The company also reported optimistic guidance for the current quarter.
Amazon, one of the so-called “Magnificent Seven” tech stocks, has seen its shares rally sharply over the past year.
Amazon shares have spiked roughly 90% since falling to $84 a share in December 2022, when the Federal Reserve’s interest rate hikes, persistent inflation and recession fears battered the e-commerce giant’s stock.
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