Will AWS continue to keep Amazon afloat while it piles investment into new business territory?
Three major tech players, Amazon, Intel and Twitter will be highly scrutinised at this critical second quarter point, with expectations for the year as a whole starting to form.
Amazon is ploughing ahead with investments at full speed, while being propped up by the success of AWS. Intel is making significant alterations to its business course as it aims to find an angle on the next phase of tech trends, while leaving some projects behind.
Twitter has presented an unimpressive performance to investors, as its figures for active users languish in the same place as last quarter.
With the results of the second financial quarter now in, investors will get a chance to form opinions of where these giants are heading in the period leading up to the end of the year.
Amazon’s second quarter financial results led to a 3% stock tumble in after hours trading due to earnings falling beneath expectations significantly.
However, Amazon’s revenue stood its ground and in fact narrowly exceeded the expected figure, reaching $37.96 billion. This current position is an increase of 25% on this point in time one year ago.
The major impact on earnings came from Amazon’s determined investment foray into an array of new shopping areas on an international scale.
While pumping investment into new projects, Amazon’s most consistent financial momentum is coming from Amazon Web Services (AWS). Growth is consistent and strong, showing a 42% increase year-on-year, providing backbone to Amazon financial results in recent years.
Amazon’s financial results have caused turbulence at the peak of the world’s rich list, with CEO Jeff Bezos falling from the number one spot after overtaking Microsoft founder Bill Gates for a brief period.
Intel’s financial results beat those expected by analysts, causing an increase of around 4% in after hours trading before subsiding shortly after.
The revenue generated by the company for the quarter was $14.76 billion, with expectations having been placed at $14.41 billion.
Intel’s achievement of this quarterly revenue figure marks the breaking of its own record yet again, beating the previous year’s result by 9%.
Operating income has also made a recovering following a slump last year due to restructuring, now amounting to $3.8 billion, and an increase of almost 200%.
Intel has had to manoeuvre considerably in recent years to remain relevant in the market, having chosen to cut away some of its Internet of Things offerings, in addition to ending its health wearables business.
The company is also tactically distancing itself from the personal computer market as trends are shifting in new directions causing sales to be down.
Twitter managed to beat predicted revenue growth and earnings for the second quarter, but took a considerable hit upon reporting a lacking user growth in comparison to last the last quarter.
The company achieved $574 million in revenue, beating an expected $536.7 million according to Thomson Reuters.
This lack of new users has proven unattractive to investors, as the share price fell away by up to 13%. Twitter revealed that its number of active users was unchanged from the first quarter.
Another weak area in the Q2 set of results was advertising revenue. Last year at the same time Twitter had accrued $535 million, while now coming in at only $489 million.
A new initiative has been introduced to target building the user base of the social media platform, a version called Twitter Lite. This version is intended to be suitable for use in developing countries where the ordinary version may not be easily accessible.