Amazon (AMZN) reported first quarter earnings that topped Wall Street estimates on the top and bottom lines, sending shares of the retail giant up around 3% in morning trading Wednesday.

Powered by a strong showing from its cloud computing segment, Amazon continued a wave of Big Tech results that have mostly wowed Wall Street even as investors turn their focus to the conclusion of the Fed's May policy meeting on Wednesday.

Net sales rose 13% from the same period last year to $143.3 billion, Amazon reported late Tuesday, topping analyst expectations of $142.6 billion, per Bloomberg data. The beat was driven by a 16% jump in Amazon Web Services (AWS) revenue, which Amazon said is on course to generate $100 billion annually.

The company reported adjusted earnings per share of $0.98 versus consensus estimates of $0.83.

Like its competitors Microsoft (MSFT) and Alphabet (GOOG, GOOGL), Amazon is wielding its heft in its cloud computing business to gain an edge in the nascent AI market. AI tools require huge amounts of data and processing power to train and run large language models and their applications, relying on cloud providers to supply vital infrastructure.

Amazon CFO Brian Olsavsky said on a call with reporters following the report that overall capital expenditures are expected to "meaningfully" increase this year from nearly $50 billion in 2023, driven by higher infrastructure costs to support growth in AWS.

Amazon is seeing strong demand on the AWS side, with customers signing up for longer deals with bigger commitments, many with generative AI components, he said.

Advertising was another strong contributor to Q1 revenue growth. The company matched analyst expectations of $11.8 billion, up 24% from the same period last year.

Even as Amazon dazzled with growth across its businesses, its outlook flashed some signs of a potential pullback in consumer spending.

"What we are seeing is a bit of a continuation of what we've said in prior quarters. Customers in the US are being very thoughtful about their spend. They look for deals. They trade down," Olsavsky said. "And that trend seems to be continuing into Q2."