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Amazon and Alphabet see sales surge

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Tech giants Amazon and Google’s parent Alphabet have posted a surge in sales over the last three months.

Shares in Alphabet jumped above $1,000 in after-hours trading after the company reported sales up 24% to $27.8bn.

Amazon, the world’s biggest e-commerce site, saw sales rise 34% to $43.7bn – nearly the size of Slovenia’s economy last year.

Meanwhile, Microsoft’s profit beat estimates on gains from cloud services.

Alphabet’s profits for the three months to 30 September rose to $7.8bn, from $5.6bn for the same quarter last year.

The company’s chief financial officer Ruth Porat said the firm was delighted with the way it was performing.

“We had a terrific quarter, with revenues up 24% year on year, reflecting strength across Google and Other Bets,” she said.

“Our momentum is a result of investments over many years in fantastic people, products and partnerships.”

Google continues to make up the vast majority of the companies revenue and income, however the so-called Other Bets unit, which includes Alphabet’s Waymo driverless car business and the Project Loon WiFi-enabled weather balloon venture, saw revenue increase and losses fall.

Total Other Bets revenue was up to $302m, from $197m last year.

Despite Amazon’s sales growth, the firm’s profits were nearly flat as it ploughed money into tech gadgets, streaming video, data centres and warehouses to support its growing empire.

The firm said profits in the three months to the end of September were $256m, up from $252m in 2016.

Shares surged in after-hours trade anyway, as investors, who had been expecting a smaller number after being warned to expect spending, cheered the firm’s growth prospects.

Since its start as an online book seller, Amazon has expanded into an increasing number of industries.

Revenue in its profitable cloud services division exceeded $4.5bn, up 42%.

Upmarket grocer Whole Foods, which Amazon acquired in August, brought in $1.3bn in sales in the quarter.

Excluding Whole Foods, sales increased 29%, Amazon said.

Sales were up 35% in North America, which accounts for the bulk of Amazon’s business. They increased 29% in its international division, which is still running at an operating loss.

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