The logo of Amazon is pictured at the company logistics center in Carquefou near Nantes, France, October 15, 2024.
The rise in cloud revenue comes as businesses maintain high spending on AI software development, offsetting weaker growth in Amazon’s e-commerce division ahead of the holiday season. Despite global trade uncertainty dampening consumer confidence, the company’s expanding cloud operations have helped stabilize overall performance.
Amazon’s market value surged by about $330 billion in extended trading. A rally of the same size during Friday’s session would mark its largest one-day percentage gain since 2015. CEO Andy Jassy said: “AWS is growing at a pace we haven’t seen since 2022. We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity.”
Chief Financial Officer Brian Olsavsky noted that capital expenditures for the full year are expected to reach about $125 billion, with even higher levels next year. Amazon recorded $89.9 billion in capital expenditures through the first three quarters, largely directed toward AI-related initiatives.
Amazon Web Services (AWS), the company’s cloud division, reported a 20% year-on-year revenue increase in the third quarter ending September, surpassing analyst expectations of 17.95%. The strong results came despite an extended outage earlier in the month that temporarily disrupted several popular websites and applications.
Analyst Ethan Feller of Zacks Investment Research commented: “The report confirms Amazon’s operations are firing on all cylinders after a year of relative underperformance.” He added that the company’s fundamentals remained stable even during periods of limited stock growth.
For the fourth quarter, Amazon projected net sales between $206 billion and $213 billion, compared with analysts’ estimates of $208.12 billion, according to LSEG data. During a call with analysts, Jassy said: “I look at the momentum we have right now, and I believe that we can continue to grow and click like this for a while. I think there are multiple places where we can expect to continue to grow,” referring to advertising and retail sales.
AWS’s performance followed strong cloud revenue reports from Microsoft (MSFT.O) Azure and Google (GOOGL.O) Cloud, the industry’s second and third largest players. Microsoft, Alphabet, and Meta (META.O) also announced plans to raise annual capital expenditures to support expanding data center and semiconductor investments.
Echoing his peers, Jassy emphasized that major technology companies remain committed to AI expansion. He said Amazon continues to integrate AI across its operations to improve efficiency and productivity, reflecting a broader trend of sustained investment in digital infrastructure and advanced computing capabilities across the tech sector.
