Amazon just delivered the earnings beat Wall Street was waiting for, sending shares soaring 10% in after-hours trading. The company's cloud division AWS accelerated to 20.2% growth - its fastest pace since 2022 - while crushing revenue expectations across the board. For investors who've watched Amazon lag behind rivals in the cloud wars, this marks a decisive turning point.
Amazon just proved the doubters wrong. The e-commerce giant's third-quarter earnings smashed expectations across every major metric, but it's the cloud numbers that have investors celebrating. AWS revenue jumped 20.2% to $33 billion, marking the division's strongest growth rate since 2022 and easily beating analyst projections of 18.1% growth.
The market's reaction was swift and decisive - Amazon shares rocketed more than 10% in extended trading, adding roughly $200 billion to the company's market cap in a matter of hours. Wall Street had been growing increasingly nervous about Amazon's ability to compete with Microsoft Azure and Google Cloud, both of which have been posting higher growth rates in recent quarters.
"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," CEO Andy Jassy said in the earnings statement. His comments underscore how Amazon's massive infrastructure investments are finally paying off as enterprises rush to adopt AI workloads.
The earnings beat was comprehensive. Amazon posted $1.95 per share versus analyst estimates of $1.57, while total revenue reached $180.17 billion compared to expectations of $177.8 billion according to LSEG data. Even the advertising division, which has faced headwinds from economic uncertainty, delivered $17.7 billion in revenue against estimates of $17.34 billion.
But it's AWS that's driving the narrative. The 20.2% growth rate represents a clear acceleration from recent quarters and signals that Amazon's investments in AI infrastructure are resonating with enterprise customers. The company has been in an arms race with Microsoft and Google to build out GPU capacity and specialized AI chips, spending billions on data centers and custom silicon.
The competitive dynamics are shifting rapidly. While Microsoft has leveraged its partnership with OpenAI to drive Azure growth, and Google has pushed its own AI models and infrastructure, Amazon has focused on being the picks-and-shovels provider for the AI boom. The strategy appears to be working, with AWS now capturing a larger share of enterprise AI workloads.
