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Amazon surprised investors with much stronger profits this quarter, thanks to huge demand for its cloud services and artificial intelligence tools. The company’s stock jumped more than 11% in early Friday trading after the results came out.
Amazon earned $1.95 per share in the third quarter, beating analyst predictions of $1.56. Its total revenue rose 13% to $180.2 billion, higher than expected.
The main growth engine was Amazon Web Services (AWS), which saw sales climb 20% to $33 billion, its fastest growth since 2022. This jump came as more companies used AWS for AI-related work. In the previous quarter, AWS had grown 17.5%, which had disappointed investors a bit.
CEO Andy Jassy said AWS is speeding up again and rapidly expanding. He shared that Amazon added 3.8 gigawatts of cloud capacity in the past year to handle rising AI needs. Analysts from Barclays said AWS now has strong AI capacity lined up for the future, expecting growth to accelerate even more.
Truist Securities analyst Youssef Squali said Amazon is pouring money into AI and cloud infrastructure to meet heavy demand, predicting AWS could keep growing at over 20%. He added that Amazon remains one of the strongest companies in e-commerce, cloud, and advertising.
Amazon’s operating income was $17.4 billion this quarter, though this included $4.3 billion in costs from an FTC settlement and employee severance. Without those charges, operating income would have reached $21.7 billion. Net income jumped to $21.2 billion from $15.3 billion last year, partly boosted by a $9.5 billion gain from its investment in AI startup Anthropic.
In terms of regions, North American sales rose 11% to $106.3 billion, while international sales increased 14% to $40.9 billion. Free cash flow dipped to $14.8 billion because of higher spending on new projects and infrastructure.
For the next quarter, Amazon expects revenue between $206 billion and $213 billion, up 10% to 13% from last year. It also projected operating income between $21 billion and $26 billion.
Jassy said AI is already helping Amazon run more efficiently and launch better tools. He highlighted strong demand for Amazon’s new Trainium2 chips and its Quick Suite platform, which helps businesses automate and speed up everyday tasks.