AWS Continues to Serve as a Reliable Cash Cow Despite Amazon Faced a Tough Time in 2022
Faisal Ghaffar 
Amazon Web Service earned $20.5 billion in the third quarter of 2022. The figure is less than $21.1 billion, expected by the analysts. While it may not sound significant, cloud computing is among a few rocketing areas, so the below-than-expected revenue was a big deal.
Since AWS has become an $80 billion business, it has plenty of room to expand despite external macroeconomic conditions. AWS is more likely to work well despite currency problems, slow growth, or a change in customers’ minds. The CEO of Amazon, Andy Jassy, may continue cost-cutting operations across the company, though chances are AWS will not be a part of this exercise.
Amazon Becomes Go-to Online Store Amid the Pandemic
Amazon emerged as the world’s go-to online store when COVID-19 shut down everything in March 2020. It was when nobody could leave their homes, and it became vital to have things come to them, and Amazon succeeded
According to Statista statistics, Amazon began COVID-19 with around 840,000 workers in the first half of 2020. By the first quarter of 2022, the company had 1.6 million employees. The pandemic freed its hold on the public, and they stopped online shopping and returned to brick-and-mortar retail.
Amazon Cut Spending & Operating Costs
Andy Jassy, the CEO of Amazon, said he had asked his managers to look for ways to reduce spending and operating costs. It is what every large organization is doing amid economic uncertainty and a changing marketplace.
Amazon’s efforts included cutting up to 10,000 employment opportunities to offset the recruitment that happened during the pandemic. The company gave up almost all the gains it earned during the pandemic, losing 50% of its value in 2022.
While Jassy had to deal with cost-cutting operations, she ran Amazon Web Service before getting promoted to the corner office. Amazon has continued to perform at the same high level as they have always done. AWS has reported a slowdown in its performance in the last months of the year as companies tried to reduce cloud costs.
Speculations Around Large AWS Slowdown
Significant pressure has been around Amazon’s stock, which has resulted in its standing below its pre-pandemic levels. The fall from grace has several possible causes, including a weak market, upcoming economic slowdown, and overinvestment in retailing infrastructure. The market hears speculations about a potential threat to Amazon stock, which is at its fragile behavior, whereas the actual concern is the significant slowdown to come at AWS soon.
Amazon Web Service SignificanceÂ
AWS has been pertinent for Amazon’s valuation for a long time, though it may not be easy to overemphasize how much it matters. Amazon Web Service makes 15 percent of the Trailing Twelve-Month revenue of the company and answers for a larger slice of its operating profit.
AWS offers more than Amazon’s overall productivity, indicating almost everything else is at a loss. However, some remaining segments, such as the 3P marketplace or advertising, are highly profitable.
The relevance of AWS causes investors to worry that something could suddenly lead to a substantial slowdown in its growth, including a generic economic drop and its overall existence. Already, AWS has slightly dropped its revenue growth in the third quarter of the year.
