Amazon reported a record profit for the fourth quarter of 2018 – its third consecutive quarter of record profit – thanks to a strong retail holiday season, its booming cloud-computing business, and its AI digital assistant Alexa.

The tech giant, which is the world’s largest company based on market capitalisation, reported a profit of $3.03bn for Q4 2018, up from the $1.86bn profit it achieved for the same quarter in 2017. Meanwhile, revenue increased 20 per cent year-over-year (YoY) from $60.5bn in Q4 2017 to reach $72.4bn.

Amazon founder and CEO Jeff Bezos was keen to highlight the importance of Alexa in helping to achieve these figures.

“Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year,” said Bezos. “The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear. In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20 per cent through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017.”

Perhaps more importantly than the strength of Alexa, Amazon Web Services (AWS), the company’s cloud-computing division, cemented its lead over Microsoft and Google and generated $7.43bn worth of sales – a YoY jump of 45 per cent from the $5.11bn reported a year ago. Alone, AWS accounted for more than two-thirds of the entire company’s operating income, raking in $2.2bn.

The positivity was short-lived for Amazon, however. During its earnings call, the company warned that it is likely to increase investments in 2019. In addition, it pointed out that it would take a hit from currency exchange rates in Q1 2019. As a reult of both, it has lowered it guidance for the ongoing quarter. This led to stocks dropping more than five per cent in extended trading.