Amazon (NASDAQ:AMZN) has surged 12% to a record high after reporting third-quarter earnings that exceeded expectations across the board, with strong growth in its cloud and advertising divisions and an upgraded spending outlook tied to artificial intelligence infrastructure.
The company posted earnings per share of US$1.95 on revenue of US$180.2bn, beating consensus estimates of US$1.58 and US$177.8bn respectively. Amazon Web Services (AWS), its dominant cloud business, generated US$33bn in revenue—up 20% from a year earlier—and delivered US$11.4bn in operating income, or roughly two-thirds of total group profit.
Digital advertising revenue rose 24% to US$17.7bn, while total company sales climbed 13%. Analysts at Pivotal Research said Amazon “has a deep moat around their core businesses driven by their unmatched scale” and continues to enjoy “numerous healthy organic growth opportunities” across cloud and advertising.
Chief Executive Andy Jassy told analysts the company would “continue to be very aggressive in investing in capacity because we see the demand,” noting that adoption of Amazon’s custom Trainium2 AI chips had become a multibillion-dollar business, up 150% quarter over quarter. Amazon also launched its new Project Rainier AI cluster, equipped with 500,000 Trainium2 chips.
Reflecting those ambitions, Amazon raised its capital expenditure forecast for the year to US$125bn from US$118bn and signalled that spending would rise again in 2026. The updated figure places it ahead of peers Google, Meta, and Microsoft in total planned investment.
While rivals’ cloud businesses grew faster in percentage terms—Google Cloud up 34% and Microsoft Azure up 40%—Amazon remains the largest cloud provider by market share. Analysts said its performance helps ease concerns that AWS is falling behind in the race for AI workloads.
For the December quarter, Amazon guided revenue between US$206bn and US$213bn, with a midpoint of US$209.5bn exceeding expectations of US$208bn.
However, the strong results come amid major restructuring. Earlier in the week, the company announced plans to lay off 14,000 corporate employees as part of an effort to streamline operations. Jassy said the decision was “not really financially driven, and it’s not even really AI driven — not right now, at least. It’s culture.”
Amazon ended the quarter with 1.58 million employees, up 2% year on year. Sales in its core online stores rose 10%, benefiting from July’s Prime Day event.
Despite Friday’s rally, Amazon shares are up only 2.4% for the year—well behind Microsoft’s 24% gain and Google’s 49% advance—but analysts said the latest results could help narrow that gap as investors reprice the stock’s AI potential.
