Zinger Key Points
- Jassy expressed confidence in Amazon's ability to lower costs and build a larger retail business with healthy margins.
- Amazon is transitioning to a regional fulfillment network in the U.S. to address rising costs and extended delivery times.
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Amazon.com, Inc AMZN CEO Andy Jassy addressed the company's short-term headwinds, continued investment in growth areas, cost control measures and generative AI in his annual shareholder letter Thursday. Here’s a breakdown of what the CEO had to say.
AWS Headwinds: In the letter, Jassy acknowledges challenges faced by Amazon Web Services (AWS) due to cautious spending by companies. Despite achieving a 29% year-over-year growth in 2022, AWS is grappling with headwinds impacting its growth rate.
Spending Amid Cost Cuts: Jassy reaffirmed Amazon's commitment to investing in growth areas including AI, chip development and advertising, despite the cost-cutting measures — including layoffs — the company has undertaken. He confirmed that Amazon would shutter businesses lacking long-term potential, while allocating resources to promising enterprises.
Confidence In Cost Control: The CEO expressed confidence in Amazon's ability to lower costs, reduce delivery times, and build a larger retail business with healthy operating margins. The company is transitioning from a national fulfillment network in the U.S. to a regional model to address rising costs and extended delivery times.
Generative AI At The Forefront: Jassy emphasized the transformative potential of large language models (LLMs) and generative AI in improving customer experiences across various applications.
The CEO also hinted at the future impact of applications like AWS's CodeWhisperer, which could significantly boost developer productivity.
The company is introuducing “Bedrock,” a service giving developers access to LLMs from Amazon and other startups to create their generative AI tools. One of Amazon's LLMs, Titan, is already generating text for blog posts, emails and delivering search results on the company's website.
Stock Information: While shares of Amazon are up 17% year-to-date, the stock is down roughly 42% since Jassy replaced Jeff Bezos as company CEO in July 2021. Bezos is executive chairman of the Amazon board of directors.
AMZN Price Action: Shares of Amazon are trading 3.21% higher Thursday to $100.97, according to data from Benzinga Pro.
Read next: Jobless Claims Exceed Expectations, Signaling Early Signs Of Cracks In US Labor Market
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