Amazon’s (AMZN) third-quarter results reignited investor optimism, sending shares up double digits and setting the stage for a strong year-end rally.
Key Points:
- Adjusted earnings per share reached $1.95 on revenue of $180.2 billion, topping estimates.
- Amazon Web Services (AWS) revenue jumped 20% year over year to $33 billion.
- The company raised its 2025 capital expenditure forecast to $125 billion, citing AI and cloud expansion.
Amazon’s Earnings Beat Sparks Record Stock Rally
In a blockbuster third quarter, Amazon posted adjusted earnings of $1.95 per share on $180.2 billion in revenue—beating Wall Street forecasts and lifting the stock more than 10%. The strong results were driven by broad-based growth across the company’s core businesses, from online retail to cloud computing and digital advertising.
Amazon’s performance was particularly impressive in the context of heightened competition and a slower macro backdrop. CEO Andy Jassy highlighted accelerating demand in artificial intelligence and cloud services as key growth drivers.
The company’s online stores, which include its Prime Day sales event, grew 10% year over year, while advertising revenue surged 24% to $17.7 billion. Together, these segments continue to generate consistent cash flow that funds the company’s heavy investment in AI infrastructure.
How Is Amazon’s Cloud Business Performing?
Amazon Web Services remains the company’s growth engine. The unit delivered $33 billion in quarterly revenue—up 20% from last year and above analyst expectations of $32.5 billion. AWS accounted for roughly two-thirds of Amazon’s total operating profit, generating $11.4 billion in operating income.
This resurgence marks AWS’s fastest growth in nearly three years, signaling renewed demand for enterprise cloud and AI workloads. Analysts noted that Amazon’s scale and infrastructure investments give it a “deep moat” against competitors like Microsoft (MSFT) and Google (GOOG).
AWS also saw its backlog expand to $200 billion, excluding several new October deals that point to continued momentum into 2026.
Why Did Amazon Raise Its Spending Forecast?
Amazon lifted its full-year capital expenditure target to $125 billion, up from $118 billion previously, citing strong demand for cloud and AI services. CFO Brian Olsavsky indicated spending could rise again in 2026 as the company doubles AWS capacity to meet customer needs.
The increased investment underscores Amazon’s strategy to cement its leadership in cloud computing and generative AI infrastructure. While this level of spending may sound massive, it’s essentially the cost of staying ahead in the high-stakes race to power the world’s next generation of digital technologies.
What It Means for Investors
For investors analyzing stocks and seeking companies that are good to invest in, Amazon’s latest results highlight several strengths. Its diverse revenue streams—from e-commerce to advertising to cloud—create stability even in volatile markets. The company’s heavy focus on AI infrastructure positions it well to capture long-term growth across industries.
While short-term volatility may persist, the fundamentals suggest Amazon remains one of the best company investments in the technology space. Its combination of profitability, scale, and strategic spending makes it a core holding for many institutional and retail investors alike.
These results also show why Amazon continues to appear on lists of best stocks to buy for investors looking beyond short-term trends. With its ongoing expansion in AI, cloud computing, and advertising, the company remains a key player in shaping the future of digital commerce.
Conclusion
Amazon delivered one of its strongest quarters in years, with growth across nearly every segment. The company’s aggressive investments in AI and cloud infrastructure, coupled with solid retail and advertising performance, have reignited Wall Street enthusiasm.
For those following investment news and learning the basics of investing, Amazon’s story underscores how innovation and scale can turn massive spending into long-term growth potential.
FAQs
What drove Amazon’s strong third-quarter results?
Higher-than-expected performance across AWS, advertising, and online retail fueled Amazon’s earnings beat.
How did AWS perform compared to expectations?
AWS generated $33 billion in revenue, up 20% year over year and above the $32.5 billion analysts expected.
Why did Amazon raise its capital expenditure forecast?
The company increased its spending outlook to $125 billion to expand its AI and cloud capacity amid rising demand.
Is Amazon a good stock to invest in?
Many analysts view Amazon as one of the best company investments due to its strong fundamentals and growth opportunities in AI, cloud, and retail.
What are Amazon’s revenue expectations for the current quarter?
The company projects revenue between $206 billion and $213 billion, slightly ahead of analyst forecasts.
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