Amazon announced higher-than-expected sales and earnings in the March quarter, despite ongoing inflation and a worsening economic environment, which analysts had predicted would lead to lower consumer and commercial cloud spending.

According to S&P Capital IQ, overall revenues increased by 9% to $127.4 billion, exceeding projections of $124.6 billion. Amazon’s online sales were steady at $51.1 billion, exceeding predictions of $50.4 billion.

Amazon Web Services revenue increased 16% to $21.4 billion, exceeding expectations of $21.2 billion. Amazon CEO Andy Jassy stated that AWS customers are “spending more cautiously,” but added, “We like the fundamentals we’re seeing in AWS, and believe there is much growth ahead.”

Amazon shares rose as much as 12% in after-hours trading after the company said it expects revenue in the current quarter to range between $127 billion and $133 billion, surpassing analyst projections of $130 billion. Its stock has risen by 28% year to date.

Overall, the corporation earned $3.2 billion in net income, a significant improvement over the $3.8 billion it lost the previous year. The Seattle-based company’s operating income was $4.8 billion, up from $3.7 billion the previous year.

Advertising revenues jumped 21 per cent to $9.5bn, ahead of forecasts for 16 per cent growth. Jassy said the ads team “continues to deliver robust growth, largely due to our ongoing machine-learning investments that help customers see relevant information when they engage with us, which in turn delivers unusually strong results for brands”.

The bullish news comes on the heels of strong profits from Microsoft, Alphabet, and Meta earlier this week. Amazon, like its Big Tech colleagues, has been focused on reducing headcount and costs, having previously declared that it would cut 27,000 jobs – almost 9% of its corporate personnel. For the quarter, it paid $500 million in severance pay.

Operating income margins increased to 3.7 percent, up from 3.2 percent a year earlier and beyond the 2.7 percent expectation. Jefferies analysts stated that they were looking for “clear evidence that profitability is improving” prior to the release.