Amazon’s shares soared more than 11% on Friday after Amazon Web Services posted a 20% revenue surge in the third quarter, easing investor concerns about the company’s position in the rapidly expanding AI market. The strong results signal a major rebound for AWS, whose $33 billion quarterly revenue remains far ahead of Google Cloud’s $15.16 billion and close to Microsoft Azure’s growing dominance.
CEO Andy Jassy said AWS is “growing at a pace we haven’t seen since 2022,” thanks to booming demand for AI-related cloud infrastructure. The upbeat outlook helped Amazon overtake Tesla and Apple in year-to-date stock gains, reversing its earlier underperformance among the “Magnificent Seven” tech leaders.
Amazon’s retail and advertising units also impressed investors. Retail sales climbed 11% year-over-year, while its fast-growing ad business jumped 24% to $17.7 billion, supported by increased ad placements on Echo devices and grocery carts. Analysts described the results as one of the strongest performances of this earnings season.
At least 23 brokerages raised their price targets on Amazon’s stock following the results. The company’s forward 12-month P/E ratio now stands at 29.6 — higher than Alphabet’s but still below Microsoft’s — suggesting investors remain confident in Amazon’s continued AI-driven expansion.
