Latest news with #AmazonWebServices
Time of India
11 hours ago
- Business
- Time of India
AWS cloud payments not taxable as royalty or technical fees: Delhi HC
Payments received by US firm Amazon Web Services , from Indian entities for rendering cloud computing services are not taxable as royalty and fees for technical service (FTS), the Delhi High Court held on Thursday. A Division Bench of justices Vibhu Bakhru and Tejas Karia dismissed the income tax department's petition holding that rendering such services by Amazon cannot be taxed either under the Income Tax Act or the India-US Avoidance of Double Taxation and Prevention of Fiscal evasion with respect to taxes on income. 'We find no merit in the contention (of department) that the amount received by the assessee for providing services would be taxable as equipment royalty.' The court said that Amazon' customers did not acquire any right of using the infrastructure and software of the US service provider for the purposes of commercial exploitation. The charges paid by Amazon's customers are for availing services, which the company provides by using its proprietary equipment and other assets, it added. "No part of its equipment or IPRs ( Intellectual Property Rights ) are alienated by the assessee (Amazon Web Services) in favour of its customers for their use," the court said in its 36-page judgment said. Therefore, the payments received cannot be considered as royalties within the meaning of Article 12(3) of the India-US Double Taxation Avoidance Agreement , it added. Live Events The assessee had received certain payments from Indian entities for rendering cloud computing services, which, according to the income tax Assessing Officer (AO) were chargeable to tax as royalty and FTS under the Act as well as the DTAA. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Amazon contended to the contrary and claimed that its receipts were for providing standard cloud computing services, which cannot be chargeable to tax either as royalties or as FTS, thus it did not file its return of income. The company's customers that had remitted the charges to the assessee for services had not withheld any tax under Section 195 of the Act for the same reason. The Revenue had initiated proceedings under Section 201/201(1A) in case of M/s Snapdeal (erstwhile Jasper Infotech), which had availed of the Amazon's services and had remitted funds to the latter as charges for the services rendered by the US company. The AO was of the opinion that the amounts received by Amazon were chargeable to tax under Act. Accordingly, the assessing officer issued notices to Amazon under Section 148 and commenced proceedings for re-assessment for assessment years (AYs) 2014-15 and 2016- 17. In its final assessment order in 2023, the AO determined Amazon's income chargeable to tax at Rs 247.68 crore in respect of AY 2014-15 and Rs 1007.81 crore for AY 2016-17. On appeal, the Income Tax Appellate Tribunal in August 2023 ruled in favour of Amazon, saying the customers were granted only a non-exclusive and non-transferable license to access the standard automated services offered by Amazon. The tribunal's order was challenged by the department before the HC.
Globe and Mail
11 hours ago
- Business
- Globe and Mail
Is Amazon Stock Ready for a Significant Rebound?
Amazon (AMZN) stock has faced a bumpy ride so far this year. Shares of the technology giant are down about 6% year-to-date amid lingering macroeconomic uncertainty. However, the macroeconomic headwinds that have weighed on Amazon stock are largely priced in. At the same time, the company's underlying business remains solid and has shown resilience. Notably, Amazon Web Services (AWS), its cloud division, continues to deliver solid growth, and the momentum in its advertising segment continues. These businesses offer steady revenue and margin expansion potential, providing a solid foundation for a significant rebound in AMZN stock. AWS: Amazon's Profit Powerhouse Amazon's AWS segment continues to be a significant growth catalyst for Amazon. The segment continues to post solid growth, delivering $29.3 billion in revenue in the first quarter of the year, up 17% from the same period last year. This puts AWS on an annualized revenue run rate of more than $117 billion, making it one of the top players in the cloud industry. A combination of expanding demand for generative AI solutions and ongoing migration from on-premises IT infrastructure to the cloud is supporting the segment's growth. Amazon's AI business is already delivering multibillion-dollar annual revenues, and is growing at triple-digit rates. Further, it remains in its early stages, signaling a long growth runway ahead. Importantly, AWS is not just a revenue growth driver, it's a profit engine. The segment generated $11.5 billion in operating income in the first quarter, representing the majority of Amazon's total operating profit. As Amazon continues to improve efficiency within AWS, the cloud business will support the company's overall profitability. Further, with a significant share of global IT spending still allocated to on-premises infrastructure, the cloud transition is far from over. Over the next decade or two, this shift will accelerate. AWS has the potential to become a multi-hundred-billion-dollar business and the rise of AI further bolsters its long-term prospects. Advertising: An Underrated Growth Driver Beyond the cloud, Amazon's advertising segment is showing tremendous promise. In the first quarter, ad revenue surged 19% year-over-year, reaching $13.9 billion. This growth, coming off an already large base, reflects the increasing relevance and strength of Amazon's advertising business. The company is benefiting from the broader adoption of its advertising solutions, which appeal to brands seeking to reach consumers across different stages of the buying journey. Advertising is now a key contributor to Amazon's profitability, both in North America and internationally, and this business is poised to become an even more prominent driver of earnings in the future. E-Commerce Efficiency and Cost Improvements While Amazon's cloud and advertising units shine, its e-commerce operations remain resilient. Amazon is focusing on improving efficiency across its fulfillment and delivery networks. A significant overhaul of its inbound logistics network has led to enhanced inventory placement, increased units per package, and, ultimately, lower delivery costs. The company is also focused on several initiatives aimed at driving operational efficiency. These include building more same-day delivery sites, expanding its rural delivery network, and incorporating automation and robotics into fulfillment centers. Moreover, strategic inventory management is reducing delivery time and lowering shipping and packaging costs. These improvements will help expand margins in the future. Amazon Is Investing in Long-Term Growth Amazon continues to make significant investments in infrastructure and technology. Much of this capital is directed toward AWS, where Amazon is developing custom silicon chips, such as Trainium, to support AI workloads. These investments aim to bolster future growth and maintain its leadership in an increasingly competitive cloud landscape. Additionally, Amazon is expanding its fulfillment and transportation infrastructure to accommodate future demand and enhance delivery speed. By investing in areas that directly support revenue growth and cost reduction, Amazon is setting the stage for sustained profitability in the years ahead. Analyst Sentiment Remains Bullish Wall Street analysts remain optimistic about Amazon's future and have a 'Strong Buy' consensus rating. The Street high price target of $305 represents a 47% potential gain from current levels. Conclusion: Is AMZN Stock Poised for a Rebound? Although Amazon stock has experienced some turbulence, the long-term outlook remains promising. The company's cloud and advertising businesses are delivering strong and consistent growth. Moreover, they're driving profitability. AWS continues to dominate the cloud space and will benefit from secular trends such as AI adoption and cloud migration. Meanwhile, Amazon's advertising arm is becoming a significant earnings contributor. In addition, Amazon's ongoing efforts to enhance efficiency in its e-commerce operations, combined with its strategic investments in infrastructure and innovation, position it well to deliver strong earnings. In summary, all these initiatives are building a solid foundation for significant future gains.
The National
a day ago
- Business
- The National
Nvidia gives strong forecast despite chip export controls
Nvidia on Wednesday forecast strong growth for the second quarter of the 2026 fiscal year, despite a loss in revenue due to export controls on its H20 AI chips to China. Nvidia expects revenue of $45 billion in the second quarter, plus or minus 2 per cent. That comes after taking an $8 billion hit due to export control limits related to the H20 chip. Nvidia beat first-quarter estimates, reporting revenue of $44.1 billion, up 69 per cent from a year ago. Analysts polled by Factset expected the company to record first-quarter revenue of $43 billion. Nvidia said it made a profit of $18.8 billion. Data centre revenue came in at $39.1 billion, compared to $22.5 billion for the same time last year. The earnings came weeks after Nvidia announced major partnerships with the UAE and Saudi Arabia during US President Donald Trump 's visit to the Gulf. Mr Huang was also present at the unveiling of the UAE-US AI Campus in Abu Dhabi during Mr Trump's visit. NVidia has also joined OpenAI, Oracle and Abu Dhabi's G42 to build Stargate UAE, which will operate in the campus. And before Mr Trump's visit to Riyadh, Nvidia joined Amazon Web Services and Advanced Micro Devices to collaborate with Humain, the Saudi Public Investment Fund's new AI company. Nvidia has a similar agreement in Taiwan. "We have a line of sight to projects requiring tens of gigawatts of Nvidia AI infrastructure in the not-too-distant future," Nvidia chief financial officer Colette Kress said during a conference call. Chief executive Jensen Huang said: 'Countries around the world are recognising AI as essential infrastructure – just like electricity and the internet – and Nvidia stands at the centre of this profound transformation." Mr Huang also said global demand remains "incredibly strong". Meanwhile, the Blackwell NVL72 AI supercomputer, which he called a "thinking machine designed for reasoning", is in full-scale production. Nvidia shares rose more than 5 per cent to $140.09 during after-hours trading. Its stock was virtually flat when trading closed on Wednesday, 0.51 per cent lower at $134.81 a share. Nvidia was among a number of tech giants that suffered large drops in share price after Mr Trump first announced his larger-than-expected tariff policy last month. But like other companies trading on Wall Street, it has since recovered. China drove much of the attention on Wednesday after the Trump administration had placed stricter export controls on Nvidia's H20 AI chip in April. Nvidia said it incurred a $4.5 billion charge in the first quarter of the 2026 fiscal year because of those controls on China. It had previously warned the latest export rules would cause it to take a hit of $5.5 billion in inventory write-off. During the conference call, Mr Huang said Nvidia cannot reduce its Hopper chip further to comply with the latest chip controls. "As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed," Mr Huang said. Commenting on the latest controls, he said shielding Chinese companies from American competition "only strengthens them abroad and weakens America's position". 'Nvidia was banking that the Trump administration was not going to block their exports of these H20 AI chips,' said Gregory Allen, director of the Wadhwani AI Centre at the Centre for Strategic and International Studies 'The Trump administration has gotten tougher on China even as it has gotten lighter on restrictions placed on other places around the world, like the UAE, like Saudi Arabia,' Mr Allen told CNBC earlier on Wednesday.
Yahoo
a day ago
- Business
- Yahoo
1 Unstoppable "Magnificent Seven" Stock Bound for a $5 Trillion Valuation
Amazon's online store division is growing at a snail's pace. Cloud computing is a huge profit driver for Amazon. 10 stocks we like better than Amazon › Each of the world's largest companies currently hovers around the low $3 trillion mark, but eventually, we'll likely see a $5 trillion business. Just a few years ago, nobody had ever seen a $1 trillion company. One company likely to reach $5 trillion over the next decade is Amazon (NASDAQ: AMZN). Amazon is an e-commerce giant, but its other offerings are what could propel it over the threshold. Online stores are Amazon's largest revenue segment, generating $57.4 billion in revenue during Q1. However, commerce revenue has notoriously slim margins, so it's unlikely that Amazon makes much profit from this segment. Additionally, online sales were Amazon's slowest-growing segment in Q1, apart from its "other" segment, with sales rising only 5% year over year. Companywide, Amazon's sales rose 9% year over year, and operating income increased by 20%. How is this possible when its biggest and most recognizable component isn't faring well? The part of Amazon's business that's often overlooked, yet that I would argue is far more important than its online stores, is Amazon Web Services (AWS). AWS is Amazon's cloud computing division, and it accounted for only 19% of sales in Q1. But what's more important is that AWS generated a 39% operating margin within its division and accounts for 63% of Amazon's total operating profit. This indicates that AWS steers Amazon's profit picture, and the one investors will focus on the most. Fortunately for investors, there's still a massive growth runway for AWS, which is being powered by two trends: artificial intelligence (AI) and a general migration to the cloud. AI has been a huge boon to cloud computing companies, as clients are looking to train and run AI models on these companies' servers instead of purchasing the expensive equipment themselves. The AI arms race is far from over, and AWS still has a ton of benefits to realize from this growing trend. Additionally, companies are still working on transitioning their workloads to the cloud, a process that across the entire economy will take over a decade to complete. By migrating to the cloud, businesses can eliminate the risk that having a single point of failure for data storage and access creates. They can also lessen or eliminate the need to purchase and maintain expensive computing equipment. Grand View Research estimates that the global cloud computing market was more than $750 billion in 2024 and expects it to rise to nearly $2.4 trillion by 2030. That projection includes multiple cloud companies, not just cloud infrastructure companies like AWS. But the general trend is there, and with a projected compounded annual growth rate for the industry of 20%, AWS will be set to deliver strong growth for years to come. Over the past 12 months, AWS generated around $112 billion in sales. Revenue grew 17% last quarter, slightly slower than market analysts expected it to grow. If AWS's revenue sustains that 17% growth rate over the next five years, its revenue will increase from $112 billion to $246 billion. If AWS can maintain its 39% operating margin, it will generate $97 billion in operating profits. For reference, Amazon generated $72 billion in operating profits over the past 12 months, with $42 billion coming from AWS. So even if Amazon's commerce platform isn't growing very fast, AWS can help propel Amazon to a $5 trillion valuation. It won't happen overnight, but if Amazon continues on its current trajectory, it's a near certainty. Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. 1 Unstoppable "Magnificent Seven" Stock Bound for a $5 Trillion Valuation was originally published by The Motley Fool
Yahoo
a day ago
- Automotive
- Yahoo
Amazon, Stellantis Exit Joint Smart Vehicle Project in Strategic Shift
May 28 - Stellantis (NYSE:STLA) and Amazon (NASDAQ:AMZN) are winding down their SmartCockpit collaboration aimed at integrating home-like digital features into vehicles, according to Reuters. The project, launched in 2022, sought to create an in-car experience that would personalize settings such as climate control, navigation, and interior lighting. It was intended to compete with digital cockpit designs by Tesla (NASDAQ:TSLA) and China's BYD (BYDDY). Warning! GuruFocus has detected 10 Warning Signs with STLA. Initially pitched as a transformative in-vehicle environment, the SmartCockpit was set to debut by late 2024 or early 2025. It also featured plans for revenue sharing: Stellantis would pay licensing fees to Amazon for its tech, while Amazon would provide incentive payments tied to user sign-ups for its streaming services. Though the SmartCockpit effort is winding down, Stellantis continues to use Amazon Web Services for data operations and includes Alexa voice functions in its vehicles. The automaker may still pursue similar digital integrations with other partners, including Google's (NASDAQ:GOOGL) Automotive Services. Shares of Stellantis were down about 1% in early Wednesday trading. Amazon stock was flat. This article first appeared on GuruFocus. Sign in to access your portfolio
