With the announcement of its second quarter earnings, Amazon didn’t just come out on top of its other cloud computing competitors; it spurred a Wall Street frenzy which resulted in Amazon Web Services (AWS) adding $40 billion during after-hours trading.
The second quarter earnings of AWS cloud computing services were announced on July 23, according to Business Insider and Forbes, and reportedly saw revenues jump 81% to $1.8 billion, which was 16 points higher than Wall Street had initially predicted.
Amazon’s stock shares also saw an increase of 17% in extended trading, Forbes reported, which was surprising because the AWS cloud computing sector comprises less than 8% of the corporation’s overall sales.
The e-commerce giant reached a market value of approximately $264 billion, surging well above the value of Wal-Mart.
For most companies, this sudden increase might be troubling and short-lived, but for Amazon, success has come quickly and in bursts of investor activity, the WSJ explained. Additionally, investors have been quick to note that Amazon’s increased market value isn’t likely to drop anytime soon, especially since the cloud computing industry has grown so much in the past decade and is expected to keep growing.
As the Wall Street Journal has noted, Amazon is known for investing the majority of its earnings back into the company, giving just as much attention to its digital updates as to the physical updates of its operations.
The company is undoubtedly a leading force among the 70% of businesses that plan to invest in data warehousing in the coming year, but it has also been careful to invest in its brick-and-mortar warehouses where inventory is stored. Amazon has implemented new technologies like robotics running on algorithms to move products around, thereby lowering costs.
With Microsoft and Google close on its heels — not to mention China-based Alibaba, which recently announced that it would begin investing in more overseas developments — it’s hard to predict if Amazon will continue to lead the cloud computing industry. A plethora of cloud computing startups is giving Amazon a run for its money as well, the WSJ noted.
If the recent stock market surge is any indication, Amazon isn’t going to back down from the challenge in the near future.
