Amazon Shares Bullish, Rise 11 Per Cent as Cloud, AI Growth Push Record Profits
Amazon’s stock soared by 11 per cent in after-hours trading on Thursday after the tech giant posted stronger-than-expected quarterly results, buoyed by resurgent growth in its cloud computing arm and rising investments in artificial intelligence infrastructure.
The e-commerce powerhouse reported a 13 per cent increase in revenue to $180.2 billion for the third quarter, while net income rose to $21.2 billion, up from $15.3 billion in the same period last year. The company also projected fourth-quarter sales of between $206 billion and $213 billion, signalling continued double-digit growth.
A key driver of the performance was Amazon Web Services (AWS), which saw revenues climb 20 per cent to $33 billion, marking its strongest growth since 2022. The rebound comes just months after a major global outage, as businesses worldwide accelerate spending on AI-driven technologies.
The company’s rivals in the cloud sector, including Microsoft and Google, also reported robust sales this week, attributing their growth to surging adoption of AI services.
Amazon said it is pouring unprecedented resources into expanding its computing and power capacity to support AI workloads.
Over the past year, the company added 3.8 gigawatts of energy capacity, the largest among cloud providers, and launched a vast computing cluster housing nearly 500,000 custom AI chips.
Capital investment jumped by $50.9 billion year-on-year, reflecting the company’s growing focus on AI infrastructure.
However, Amazon’s operating income remained flat at $17.4 billion after absorbing a $2.5 billion charge for a settlement with the US Federal Trade Commission (FTC) and $1.8 billion in severance costs linked to its planned job cuts.
The company confirmed plans to trim about 14,000 positions across departments including human resources, advertising, and management, as part of efforts to streamline operations and reallocate resources toward AI innovation.
The FTC settlement, which centred on accusations that Amazon used deceptive practices to enrol and retain Prime subscribers, resulted in $1.5 billion in consumer refunds and $1 billion in civil penalties. The company denied wrongdoing in the case.
Analysts said Thursday’s results underscore Amazon’s growing dependence on cloud and AI services to drive profitability, as traditional e-commerce margins tighten amid global economic pressures.
With its latest earnings report, Amazon has reaffirmed its dominance in the cloud computing race and strengthened investor confidence in its long-term AI strategy.
