Amazon Cloud Revenue Soars as AI Demand Boosts Growth and Market Value

Amazon’s cloud division, Amazon Web Services (AWS), recorded its fastest growth in nearly three years, lifting the company’s shares by 14% in after-hours trading and adding roughly $330 billion to its market value. The surge was driven by relentless demand for artificial intelligence (AI) software development, offsetting slower e-commerce growth ahead of the holiday season.

AWS reported a 20% revenue increase in the third quarter ending September, surpassing analyst expectations of 17.95%. This performance follows a challenging period marked by a major AWS outage but underscores Amazon’s strengthening position in the cloud market. CEO Andy Jassy highlighted accelerating demand for AI and infrastructure services, saying AWS is “growing at a pace we haven’t seen since 2022.”

Chief Financial Officer Brian Olsavsky projected full-year capital expenditures of around $125 billion, mostly focused on AI projects, with spending expected to rise next year. Amazon’s total sales for the upcoming quarter are forecast between $206 billion and $213 billion, above Wall Street’s $208.12 billion estimate.

Advertising also performed strongly, with revenue climbing 24% to $17.7 billion as Amazon expanded ad placements across platforms, including Echo devices and smart carts. Despite laying off about 14,000 corporate employees, Jassy emphasized that the cuts were driven by efficiency rather than financial strain.

AWS continues to serve as Amazon’s profit engine, contributing around 60% of total operating income. Its success mirrors similar growth trends from Microsoft’s Azure and Google Cloud, as Big Tech firms increase investments in AI, chips, and data centers.

Federal Reserve Chair Jerome Powell recently noted that today’s AI investments differ from the dot-com bubble, citing solid earnings and real business foundations. Amazon’s strong cloud performance reaffirms its pivotal role in the global AI and cloud infrastructure boom.