Amazon shares jumped more than 10% in extended trading Thursday after the company posted third-quarter earnings that exceeded expectations, along with strong growth in its cloud-computing unit.
Here’s how the company did, compared with estimates from analysts polled by LSEG:
- Earnings per share: $1.95 vs. $1.57 estimated
- Revenue: $180.17 billion vs. $177.8 billion estimated
Wall Street was also looking at other key revenue numbers:
- Amazon Web Services: $33 billion vs. $32.42 billion expected, according to StreetAccount
- Advertising: $17.7 billion vs. $17.34 billion expected, according to StreetAccount
Revenue in Amazon’s cloud unit accelerated 20.2% during the quarter, blowing past analysts’ expectations of 18.1%. Cloud growth has been a key area of concern for the company, as it faces intensifying pressure from rivals Google and Microsoft, which also reported quarterly results this week.
Google’s cloud revenue increased 34% during the third quarter, while Microsoft Azure recorded growth of 40%.
Amazon CEO Andy Jassy said in a statement that AWS is “growing at a pace we haven’t seen since 2022” and touted robust artificial intelligence demand.
“We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity — adding more than 3.8 gigawatts in the past 12 months,” Jassy said.
While Amazon remains the leading provider of cloud infrastructure technology, it’s been battling the perception that it’s missing out on a flurry of highly lucrative AI deals for cloud services. That concern has weighed on Amazon’s stock, which is up roughly 1.6% year to date, trailing its Magnificent Seven peers.
The company on Wednesday opened its $11 billion AI data center called Project Rainier, built exclusively to run models from Claude chatbot creator Anthropic.
For the current quarter, Amazon said it expects sales to be $206 billion to $213 billion. The midpoint of the revenue outlook, $209.5 billion, topped estimates of $208 billion, according to LSEG.
Operating income is expected to be between $21 billion and $26 billion, compared with analysts’ projected $23.8 billion.
AI has become a major area of investment across Amazon, including in its retail, cloud, devices and ads businesses. The company is responding to an explosion of interest around generative AI, particularly after the launch of OpenAI’s ChatGPT chatbot in 2022.
Amazon has introduced Q, a chatbot for businesses, and Bedrock, a generative AI service for cloud customers. Last February, it rolled out a shopping chatbot called Rufus that can answer questions and suggest products.
The company said 250 million shoppers have used Rufus this year, with 60% of users “more likely to complete a purchase” after interacting with the chatbot.
Sales in Amazon’s core online stores unit posted solid growth of 10% during the quarter.
The company has been navigating uncertainty around President Donald Trump’s shifting trade policies, though Jassy told investors last quarter that the tariff increases haven’t dented consumer demand or led to significant price increases.
Amazon also cited tariffs and trade policy as factors that could make its guidance subject to change.
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Amazon year-to-date stock chart.
