Amazon’s cloud sales are growing the most in 15 quarters. Investors sent the stock down on AI capex fears

Amazon on Wednesday reported strong increases in profits and net sales during its fiscal first quarter, helped by surging growth in its prominent cloud computing unit.

The e-commerce and technology company said that sales in its cloud computing unit were up 28% in the January-March period, the fastest increase in 15 quarters. Amazon Web Services had 24% sales growth in the fourth quarter, which followed the division’s 20% growth in the third quarter.

The Seattle-based company also offered a bullish outlook for net sales in the current quarter, surpassing analysts’ estimates. However, shares slid nearly 2% in after-hours trading before rising about 3%.

Investors were closely watching Amazon’s quarterly earnings to see if the company’s $200 billion investment in artificial intelligence, robots, semiconductors and satellites is starting to pay off. The planned expenditure for the year marked a 60% increase from Amazon’s $128 billion in capital spending last year and spooked investors, sending the stock down 11% in after-hours trading when it was announced in February.

CEO Andy Jassy defended the spending during the previous quarterly earnings call, saying Amazon expected long-term returns on its invested capital.

The results from the latest quarter underscored that demand keeps growing........

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