Amazon shares jumped more than 11 percent in early trading on Friday after the company posted strong third-quarter results driven by a resurgence in its cloud computing arm, Amazon Web Services (AWS), and an upbeat sales forecast.
The performance eased investor concerns that the tech giant was losing ground in the fast-evolving artificial intelligence (AI) race. AWS, which anchors Amazon’s AI and digital infrastructure initiatives, recorded a 20 percent rise in revenue to $33 billion — more than double Google Cloud’s $15.16 billion — reinforcing its dominance despite Microsoft Azure’s 40 percent and Google Cloud’s 34 percent growth.
The results drew applause from Wall Street, with analysts calling AWS’s rebound a potential turning point for Amazon. Portfolio manager Jed Ellerbroek of Argent Capital said there had been widespread concern about AWS losing market share to rivals Microsoft and Google but noted that “AWS is aboard the train as well and they’re seeing a big revenue increase.” He added that most investors had expected a rebound in the fourth quarter or early next year, but the recovery came sooner than anticipated.
Before the rally, Amazon’s stock had gained only 1.6 percent this year, making it the weakest performer among the “Magnificent Seven” tech firms, which include Apple, Microsoft, Tesla, and Alphabet. However, Friday’s surge saw Amazon overtake Apple and Tesla in year-to-date gains, signaling renewed investor confidence. CEO Andy Jassy attributed the improved outlook to strong demand for AI services and core cloud infrastructure, noting that AWS was “growing at a pace we haven’t seen since 2022.”
Market analysts say Amazon’s strong showing underscores its capacity to compete effectively in the AI era. eToro’s Farhan Badami described the company’s performance as “one of the strongest of this earnings season,” dispelling doubts about its scalability.
Like other Big Tech players, Amazon also projected a rise in capital expenditures next year to support its expanding AI operations. The company’s forward 12-month price-to-earnings ratio now stands at 29.63, above Alphabet’s 25.98 but slightly below Microsoft’s 31.72, reflecting its revived growth trajectory.