Amazon.com Inc. (NASDAQ:AMZN) surged more than 12% in premarket trading Friday after posting quarterly results that topped Wall Street expectations, fueled by a rebound in its cloud computing unit and accelerating demand for artificial intelligence services.
For the third quarter, Amazon reported earnings per share of $1.95, exceeding analysts’ forecasts of $1.56, while revenue climbed 13% year-over-year to $180.2 billion, above estimates of $177.75 billion.
Amazon Web Services (AWS), the company’s most profitable segment, saw sales jump 20% to $33 billion, marking its fastest growth rate since 2022 as AI-driven workloads boosted cloud usage. This compares with a 17.5% increase in the prior quarter, which had fallen short of expectations.
CEO Andy Jassy said AWS is “re-accelerating” and expanding rapidly, adding 3.8 gigawatts of capacity in the past year.
“Despite playing a bit of catch up, AWS has secured significant AI capacity over the next several years,” noted Barclays analyst Ross Sandler. “We expect growth to accelerate from here,” he added.
Truist Securities analyst Youssef Squali highlighted that Amazon “is investing aggressively in AI and is building out capacity to satiate the significant demand it’s currently seeing, which should help sustain 20%+ growth at AWS.” He added, “We see AMZN as one of the best plays on the secular growth of eCom, Cloud, and Advertising, all at a compelling valuation.”
Operating income held steady at $17.4 billion, including $4.3 billion in one-time costs from an FTC settlement and severance charges. Excluding those, operating income would have risen to $21.7 billion. Net income climbed to $21.2 billion from $15.3 billion a year earlier, supported by a $9.5 billion gain from the company’s investment in Anthropic.
By region, North America sales increased 11% to $106.3 billion, while international sales rose 14% to $40.9 billion. Free cash flow declined to $14.8 billion amid higher capital expenditures.
Looking ahead, Amazon expects fourth-quarter revenue between $206 billion and $213 billion, implying 10%–13% growth, in line with consensus estimates. The company projects operating income between $21 billion and $26 billion.
Jassy said AI is driving “meaningful improvements” throughout Amazon’s operations, citing strong adoption of its Trainium2 chips and the rollout of Quick Suite, an AI-powered platform designed to automate and accelerate workplace tasks.