Amazon Shares Jump 14% on Strong AI-driven Cloud Growth

Amazon just proved that when it comes to infrastructure, the boom in artificial intelligence dictates market velocity. The company’s cloud division posted its fastest revenue gain in nearly three years, crushing analyst expectations and sending shares soaring 14% in after-hours trading.

This surge instantly lifted the company's market value by about $330 billion. If that same rally holds through Friday's official session, it will mark Amazon's biggest single-day percentage gain since 2015.

The online retailer benefits directly from relentless corporate spending on AI software development. Massive demand for cloud services is compensating for softer sales in the e-commerce sector, which faces consumer confidence issues tied to global trade uncertainty as it gears up for the critical holiday season.

AWS Accelerates Past Benchmarks

Amazon Web Services (AWS), the company's cloud unit, reported a substantial 20% rise in revenue for the third quarter ending in September. This figure significantly surpassed average estimates of a 17.95% increase.

The sheer strength of these numbers allowed Amazon to shrug off a tough prior week, which included an AWS outage that brought down many popular websites and consumer applications.

CEO Andy Jassy directly addressed the unit's performance: “AWS is growing at a pace we haven’t seen since 2022. We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity.”

The results affirm the company’s operational focus. “The report confirms Amazon’s operations are firing on all cylinders after a year of relative underperformance,” said Ethan Feller, stock strategist at Zacks Investment Research. Feller noted that despite the stock's nearly flat growth this year, “the company’s fundamentals never meaningfully weakened.”

Betting Big on Tomorrow’s Infrastructure

The AWS performance follows stellar cloud revenue growth reported by rivals Microsoft’s Azure and Google Cloud, the number two and number three players. Does this signal a new, extended growth phase for the entire cloud industry, regardless of global economic slowdowns?

Betting on this future, Amazon projected increased capital spending for the coming year. Chief Financial Officer Brian Olsavsky expected full-year capital expenditures to hover around $125 billion, with an even higher figure anticipated next year. The company already booked $89.9 billion in capital expenditures through the first three quarters, dedicating a large portion of that investment to AI projects.

For the fourth quarter, Amazon projects total net sales between $206 billion and $213 billion. This outlook also exceeds what analysts were expecting; LSEG data showed a consensus revenue estimate of $208.12 billion.