Amazon.com Inc.’s stock jumped 10% in after-hours trading Thursday after its cloud division, Amazon Web Services (AWS), delivered its strongest quarterly growth since 2022, easing investor concerns that the world’s largest provider of cloud computing had lost ground to rivals Microsoft and Google.
AWS reported revenue of $33 billion for the quarter ended September 30, up 20% from a year earlier.
That increase surpassed analyst expectations of 18% and marked the biggest annual jump in almost three years.
The rebound followed several quarters of slower expansion as the company wrestled with delays in building new data centres and soft enterprise spending.
Cloud rebound reassures investors
The results gave investors renewed confidence in Amazon’s cloud future, which has faced mounting pressure from competitors that have been faster to capitalise on artificial intelligence.
Amazon shares closed regular trading at $222.86 before climbing sharply in extended dealings.
Chief Executive Andy Jassy said in a statement that demand for AI and core infrastructure services remains strong.
“We’ve been focused on accelerating capacity — adding more than 3.8 gigawatts in the past 12 months,” Jassy said, underscoring the scale of Amazon’s cloud expansion efforts.
Across the company, total sales rose 13% to $180.2 billion, exceeding the $177.8 billion average estimate.
Amazon’s capital expenditures for the quarter climbed 55% to $35.1 billion as the company expanded its data centre and chip-building capabilities to support AI workloads.
AI investment lifts performance
Under Jassy’s leadership, Amazon has been streamlining its e-commerce operations while doubling down on higher-margin initiatives such as cloud computing, advertising, and third-party merchant services.
Yet the focus in recent quarters has tilted decisively toward AI investments intended to sustain AWS’s dominance.
The company highlighted that its Trainium2 AI chip is now fully subscribed, describing the line as a multibillion-dollar business.
By producing more of its own chips, Amazon aims to reduce its reliance on third-party hardware makers and improve performance for customers building generative AI models.
A central pillar of that AI strategy is Amazon’s partnership with Anthropic PBC, the developer behind the Claude chatbot.
Amazon has invested $8 billion in Anthropic and constructed specialised data centres using custom AWS hardware under an initiative called Project Rainier.
The infrastructure, now operational, supports Claude’s training and deployment at scale.
Competitive pressure remains
Despite AWS’s strong rebound, Amazon still faces fierce competition. Microsoft and Google have both reported faster growth in their cloud segments, buoyed by their early integration of AI features into products like Azure and Google Cloud Platform.
Google this month also reached a multibillion-dollar chip deal with Anthropic, underscoring the intensity of the rivalry.
For Amazon, the latest quarter signals renewed progress in cloud computing and a validation of its heavy investments in infrastructure and AI.
Investors are betting that the momentum will carry into next year as demand for generative AI tools continues to expand globally.
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