Amazon Stock Rises 10% After Earnings Beat Estimates, Cloud Revenue Surges Amid AI Investment Push

Amazon shares surged more than 10% in extended trading Thursday after the company reported third-quarter earnings that surpassed analyst expectations, driven by strong performance in its cloud computing division. The results came as Wall Street closely watched key revenue metrics, with Amazon’s cloud unit posting a 20.2% year-over-year growth, well above the 18.1% forecasted by analysts polled by LSEG. This marks a significant improvement in sentiment around Amazon Web Services (AWS), which has faced increasing pressure from rivals Microsoft Azure and Google Cloud. Microsoft Azure reported 40% growth, while Google’s cloud revenue rose 34% in the same quarter. Despite this, Amazon CEO Andy Jassy emphasized that AWS is now growing at a pace not seen since 2022, citing robust demand in both artificial intelligence and core infrastructure. “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. The company recently launched Project Rainier, a $11 billion AI data center built exclusively to run models from Anthropic, the creator of the Claude chatbot, underscoring Amazon’s growing commitment to AI infrastructure. In its guidance for the current quarter, Amazon projected revenue between $206 billion and $213 billion. The midpoint of that range, $209.5 billion, exceeded the $208 billion estimate from analysts. Operating income is expected to fall between $21 billion and $26 billion, slightly above the projected $23.8 billion. AI has become a central focus across Amazon’s business, spanning retail, cloud, devices, and advertising. The company has rolled out several AI-powered tools, including Q, a business-oriented chatbot, and Bedrock, a generative AI service for AWS customers. In February, it introduced Rufus, a shopping chatbot that helps users find products and answer questions. Amazon reported that 250 million shoppers have used Rufus this year, with 60% of users more likely to complete a purchase after engaging with the tool. The strong earnings and positive outlook have reignited investor confidence, particularly as Amazon works to solidify its position in the fast-evolving AI landscape.