Amazon Q3 Earnings Exceed Expectations, Driven by Strong AWS Performance and AI Investments

Amazon.com Inc (NASDAQ) reported third-quarter results that exceeded analyst expectations, propelling its stock up by 5.7% in after-hours trading despite issuing slightly lower-than-anticipated guidance for the upcoming quarter.

The company posted an adjusted earnings per share (EPS) of $1.43, surpassing the analyst consensus of $1.14 by $0.29. Quarterly revenue reached $158.9 billion, above the $157.25 billion forecast, and marked an 11% year-over-year (YoY) increase.

Key Segment Highlights

• AWS Cloud Division: Amazon Web Services (AWS) saw a 19% YoY revenue growth, reaching $27.5 billion. AWS continues to be a key growth driver for Amazon, reinforcing its position in the competitive cloud market.
• North America and International Segments: Sales in North America rose by 9% YoY to $95.5 billion, while international sales grew 12% YoY, reaching $35.9 billion.

Outlook and AI Expansion

While Amazon provided a fourth-quarter revenue guidance of $181.5-$188.5 billion, this was slightly below the midpoint of analyst expectations at $186.36 billion. The company projects Q4 operating income to range between $16.0 billion and $20.0 billion.

Amazon emphasized its ongoing investment in artificial intelligence (AI) advancements. This includes expanding its generative AI shopping assistant, Rufus, to several new markets and launching innovative AI-powered tools to support both sellers and advertisers, positioning Amazon at the forefront of AI-driven e-commerce and cloud services.