Amazon Web Services (AWS) reported its strongest growth rate in almost three years, alleviating investor concerns about losing ground to competitors in the cloud computing market. AWS revenue reached $US33 billion ($50 billion), a 20 per cent increase year-over-year, marking the most significant rise since the end of 2022. This figure surpassed analysts’ average estimate of 18 per cent growth, giving the stock price a boost. Amazon is a global online retailer that also provides cloud computing services, digital streaming, and artificial intelligence technologies. Amazon Web Services provides on-demand cloud computing platforms and APIs to individuals, companies, and governments, on a metered pay-as-you-go basis.
Following the announcement, Amazon shares jumped approximately 10 per cent in extended trading after closing at $US222.86 on Thursday. The stock’s performance had previously lagged behind industry peers, with investors expressing concerns over the company’s progress in capitalising on its AI products. In comparison, Microsoft and Alphabet’s Google have demonstrated faster growth in their respective cloud computing divisions than AWS.
Chief executive officer Andy Jassy stated that the company continues to observe strong demand in both AI and core infrastructure. He added that their focus remains on accelerating capacity, highlighting the addition of more than 3.8 gigawatts in the past 12 months. For the quarter ending September 30, Amazon’s overall sales increased by 13 per cent to $US180.2 billion, exceeding analysts’ projections of $US177.8 billion.
Under Jassy’s leadership, Amazon has concentrated on enhancing the retail business’s profitability through increased automation and the sale of higher-margin advertising and services to online merchants. While these efforts have taken a backseat in the headlines, investors are now focused on the company’s prospects in the competitive artificial intelligence landscape.
