Minutes after the NASDAQ Composite closed at a record high, three of the biggest bellwethers in technology reminded the market precisely why investors are so bullish on companies that do business through the Internet.
Amazon.com Inc for the first time broke out sales from its division that sells computing power and software via the Internet, reporting a 49 percent jump last quarter. Microsoft Corp posted profit that topped analysts’ estimates, also underscoring healthy demand for software delivered through the cloud. Google Inc benefited from rising volume of online ads.
The numbers are a testament not only to the endurance of the Internet as a conduit of commerce and information, but also to the ways it has revolutionized the way the world’s biggest corporations operate. The three companies have been at the heart of these changes since the Internet’s inception as a business tool and are now vying for a bigger slice of the still-fledgling market for cloud computing.
The NASDAQ Composite climbed 0.4 percent on Thursday to its highest level in 15 years, topping its dotcom era high.
Amazon shares jumped as much as 8 percent in extended trading after the company reported first-quarter sales that beat analysts’ estimates. Sales jumped 15 percent to US$22.7 billion, the company said in a statement. Analysts on average projected $22.4 billion, according to data compiled by Bloomberg.
Revenue from Amazon Web Services Inc, which provides data storage and computing power to other businesses, surged to US$1.57 billion. Amazon Web Services helps Amazon benefit from growth in traffic to the Web sites of other companies, including Pinterest Inc and Netflix Inc. The unit generated first-quarter profit of US$265 million, helping to make up for losses in other parts of the company’s business.
Amazon said it intends to keep investing in new businesses that would expand its reach with customers, including data centers, one-hour delivery in certain cities and streaming video content.
Microsoft reported profit that exceeded analysts’ estimates as growth in cloud software sales and more expensive versions of server programs made up for slowing demand for PC products. The stock gained 3.4 percent in late trading.
Profit, excluding costs related to restructuring and integration, was US$0.62 per share on sales of US$21.7 billion in the third quarter ending March 31, Microsoft said on Thursday. Analysts had estimated US$0.53 on sales of US$21.1 billion, according to data compiled by Bloomberg.
Google’s results showed that its strategy of stepping up investments to lure more users and advertisers is paying off, fueling gains in the number of ads it sold in the first quarter.
While profit and sales came in just short of estimates, costs were kept well under control, boosting investor confidence and sending Google’s shares up 3.5 percent in extended trading.
The company’s sales, minus revenue passed to partners, rose 14 percent to US$13.9 billion in the first quarter, the company said in a statement on Thursday. That compared with analysts’ average projection of US$14 billion.
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