Shares of Amazon.com Inc. (NASDAQ:AMZN) surged more than 11% in early trading Friday after the tech giant reported better-than-expected third-quarter results, fueled by renewed growth in its Amazon Web Services (AWS) division and soaring demand for artificial intelligence (AI) infrastructure.
The company posted earnings per share of $1.95, surpassing Wall Street’s estimate of $1.56, while revenue rose 13% year-over-year to $180.2 billion, beating forecasts of $177.75 billion.
Sales at AWS — Amazon’s most profitable business segment — jumped 20% to $33 billion, marking its fastest growth rate since 2022, as enterprise customers expanded cloud workloads to support AI applications. That compares with 17.5% growth in the prior quarter, which had disappointed investors.
CEO Andy Jassy said AWS is “re-accelerating” and scaling infrastructure at a record pace, adding 3.8 gigawatts of new capacity over the past year to meet growing customer demand.
“Despite playing a bit of catch up, AWS has secured significant AI capacity over the next several years,” said Barclays analyst Ross Sandler, who added, “We expect growth to accelerate from here.”
Truist Securities analyst Youssef Squali said 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 Amazon as one of the best plays on the secular growth of e-commerce, cloud, and advertising, all at a compelling valuation.”
Operating income for the quarter was $17.4 billion, though that figure includes $4.3 billion in one-time expenses tied to an FTC settlement and severance costs. Excluding these, operating income would have reached $21.7 billion.
Net income rose to $21.2 billion from $15.3 billion a year earlier, bolstered by a $9.5 billion gain from the company’s investment in Anthropic.
Regionally, North America sales grew 11% to $106.3 billion, while international sales rose 14% to $40.9 billion. Free cash flow fell to $14.8 billion, reflecting higher capital expenditures as Amazon expands data center capacity and AI infrastructure.
For the fourth quarter, Amazon expects revenue between $206 billion and $213 billion, signaling 10% to 13% growth, in line with Wall Street projections. The company forecast operating income between $21 billion and $26 billion.
Jassy said AI is driving “meaningful improvements” across the company, pointing to rapid adoption of Trainium2 chips and the launch of Quick Suite, an AI-powered agent platform aimed at boosting productivity and automating workplace tasks.