Amazon.com (AMZN) - Get Amazon.com Inc. Report on Tuesday named 23-year veteran Andy Jassy as the company’s incoming CEO, marking the ongoing ascendancy of the company’s web services unit as a center of growth and profitability at the web and retail giant.
Jassy, 53, is currently CEO of Amazon Web Services and is slated to take on the CEO role in the third quarter when founder and current CEO Jeff Bezos transitions to the executive chairmanship of the company.
Jassy joined Amazon in 1997, according to his bio on the company’s investor relations web site. Jassy held a variety of positions at the company before launching its web services unit in 2003.
The unit began offering storage, database and application services in 2006, paving the way for cloud computing operations that have grown to be ubiquitous in recent years.
Jim Cramer was buying in on the news that Jassy is taking over as CEO of Amazon.
In a 2019 Recode interview with Kara Swisher, Jassy said he started at Amazon the Monday after his last exam in graduate school. “I wanted a consumer company and I wanted a place that was very entrepreneurial and I wanted a place where if I was able to help start a business there was no ceiling to what we could pursue,” Jassy said in the interview.
In a statement announcing his transition to executive chairman, Bezos said, “Andy is well-known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.”
The onset of the COVID-19 pandemic has only accelerated growth in the cloud infrastructure market, where Amazon holds more than 30% of the market share, by most estimates.
The growth is also highly profitable. In the just-completed fourth-quarter, AWS generated $12.7 billion in sales, up from $9.9 billion a year earlier. The unit generated $3.56 billion in operating income in the latest quarter, more than half of the company’s consolidated operating income of $6.9 billion.
Amazon reported better-than-expected revenue, earnings and guidance in its fourth-quarter earnings release, which also announced Bezos' move and Jassy's incoming role.
Shares of Amazon rose $17, or 0.5%, to $3,397 in after-hours trading Tuesday. The stock gained 1.1% in regular trading.
Amazon is a part of Jim Cramer’s Action Alerts PLUS investing club.