Fwd: The Information AM – Amazon Reports Stronger Results Across the Board

Happy Wednesday! Amazon reports strong first-quarter results. Walmart shuts down all of its health clinics due to lack of profitability. Binance co-found Changpeng Zhao is sentenced to four months in prison.

Amazon’s international e-commerce business turned a profit in the first quarter for the first time since 2021 amid a broader recovery in the company’s businesses that lifted its operating profit 220% to $15.3 billion on 12.5% higher revenues.

The improvement in the international business follows the company’s decision to pump the brakes on some new country launches, as The Information reported in March, as well as CEO Andy Jassy’s broader cost cutting efforts.

Operating margins in Amazon’s North America unit also
improved, with Amazon reporting a $5 billion profit in the first quarter compared to a $900 million profit a year earlier. And the company’s cloud unit AWS reported sharply higher profit margins on revenue growth of 17%, the strongest quarter for AWS since the end of 2022. Amazon shares rose about 3% in after-hours trading on Tuesday.

Walmart is closing all 51 of its healthcare clinics and ending virtual care services, the company said on Tuesday, calling the business unprofitable and unsustainable.

The clinics were located next to Walmart stores in six U.S. states and offered primary and urgent care, as well as services like X-rays and dental work. The retail giant had opened the first clinic in 2019 and added online health services in 2021 when it acquired the telehealth company MeMD. Walmart said in a press release that factors including “escalating operating costs” had led to a “lack of
profitability that make the care business unsustainable for us at this time.” Walmart will continue to operate its thousands of pharmacies and vision centers.

Walmart’s moves into healthcare had helped spur archrival Amazon to make its $3.9 billion acquisition of One Medical, which also offers in-person care and telehealth services. While Amazon hasn’t broken out One Medical results, the company reported an operating loss of $420 million in 2022, the last full year before Amazon completed its acquisition.

Changpeng Zhao, the co-founder and former CEO of Binance, the world’s largest crypto exchange, was sentenced to four months in prison by a judge in a Seattle federal court Tuesday.

Binance and Zhao, 47, pleaded guilty last November to violating anti-money laundering laws and the company agreed to pay a $4.3 billion penalty. The sentence was shorter than the three-year prison time that prosecutors had asked for. Lawyers for Zhao had sought probation instead of jail time.

Advanced Micro Devices on Tuesday raised its projected data center chip sales to more than $4 billion this year, from a January projection of $3.5 billion, thanks in part to its new chip that competes with Nvidia’s.

The bump reflects demand for AMD’s new graphics processing units, known as the MI300, the company said on an earnings call with investors. The 15% increase in projected sales follows a 75% increase in projected 2024 data-center chip sales three months ago. Together, the changes mean AMD is now projecting sales of the data center chip to be
more than twice what it projected just a few months ago.

The increased projection suggests AMD is gaining ground on Nvidia, but remains far behind its larger rival. Nvidia’s data center revenue, largely for GPU sales, was $18.4 billion in the most recent quarter alone. AMD’s stock fell 7% in after hours trading.

AMD says Microsoft, Meta Platforms and Oracle—which are all Nvidia customers—bought its new AI chips. The Information has reported that Amazon Web Services has no current plans to offer the chips and is focusing on Nvidia and its own homegrown AI chips.

Pinterest shares surged nearly 20% in after-hours trading on Tuesday after the online scrapbooking site reported its fastest revenue growth since the e-commerce boom of 2021.

The company’s revenue rose 23% to $740 million in the first quarter, a jump that comes amid a broader digital ad rebound and after Pinterest added features to make it easier for users to buy items they see on its site. Pinterest said monthly active users rose 12% from a year earlier to 518 million, with Gen Z representing around 40% of total users. Pinterest projected second quarter revenue of between $835 million and $850 million, up 18% to 20% from a year earlier.

Amazon announced on Tuesday that it is now making its AI-powered assistant, Q, generally available to customers. Q helps developers generate, test and debug code and also allows employees to ask questions about their company’s data in natural language.

Q is the latest example of big tech companies developing “AI agents,” or AI-powered software that can complete complex, multi-step tasks without much guidance from users. Microsoft, OpenAI and Google have also made efforts to build AI agents for enterprises in recent times, The Information previously reported.

Eight daily newspapers owned by the investor Alden Global Capital sued Microsoft and OpenAI on Tuesday, the New York Times reported, alleging the tech firms had used the newspapers’ copyrighted articles to train their AI models without permission.

The lawsuit follows a similar case filed by the New York Times Company in late December. And it highlights a split in the news industry: publishers such as The Financial Times and Business Insider owner Axel Springer have reached licensing agreements with OpenAI, while other publishers are demanding more money than tech firms are offering.

The Information reported on Tuesday that several publishers, such as CNN and IAC’s Dotdash Meredith, are unhappy with deals being offered. More lawsuits are expected.