Amazon shares soared more than 12% on Friday to a 52-week high after the company posted stronger-than-expected third-quarter results and signaled renewed momentum in its cloud computing and advertising businesses.
The performance eased investor concerns about Amazon Web Services (AWS), which had shown signs of slowing earlier this year, and reignited confidence in the tech giant’s growth trajectory amid rising AI demand.
The stock surge also powered the broader market indices in the session.
The Dow Jones Industrial Average edged up 0.31% to around 47,671.99, just below its record close of 47,706 set on October 28.
The S&P 500 gained 0.8%, while the Nasdaq advanced roughly 1.5%, powered by Amazon’s surge.
AWS growth accelerates after period of uncertainty
AWS revenue climbed 20% year-over-year to $33 billion in the September quarter, topping analyst expectations of $32.5 billion and marking its fastest growth in nearly three years.
The cloud division’s rebound comes after several quarters of deceleration that had raised questions about Amazon’s competitiveness in artificial intelligence and enterprise computing.
Evercore ISI analyst Mark Mahaney described the resurgence as an “AWS unlock,” highlighting a 150% sequential jump in revenue from Amazon’s Trainium custom-chip business—an area that had previously been a source of investor skepticism.
“The AI narrative has flipped positive for AWS,” Mahaney wrote, noting that demand for AI infrastructure and training workloads has reignited growth.
Wedbush analyst Scott Devitt echoed the sentiment, observing a “positive narrative shift” as AWS growth improved from 17.5% in the June quarter to 20.2% in the September period.
Devitt projects that AWS growth could reach 22% in the December quarter, citing rising demand, expanding backlog, and higher capital expenditures.
Amazon CEO Andy Jassy emphasized that demand for AI and core infrastructure remains strong, saying the company has doubled AWS capacity since 2022 and plans to double it again by 2027.
The company now expects capital expenditures to reach $125 billion this year, up from $100 billion, and anticipates further increases in 2026.
Broader business strengthens amid advertising and retail momentum
While AWS remains Amazon’s profit engine, other segments also posted strong results.
Advertising revenue jumped 24% year-over-year, accelerating from the 23% pace recorded in the prior quarter.
Analysts highlighted the segment’s growing importance to Amazon’s bottom line, given its high margins relative to the company’s retail operations.
Pivotal Research Group’s Jeffrey Wlodarczak noted that Amazon “operates two high-margin growthy businesses”—AWS and advertising—alongside its vast logistics network.
He said AI and robotics could help Amazon “materially juice margins” over the medium to long term.
Retail, though lower-margin, continues to be Amazon’s revenue backbone.
Mahaney called retail growth “robust” and “consistent,” while Mizuho’s Jordan Klein described both e-commerce and advertising as “monsters” with strong near-term catalysts.
Earnings beat, analyst optimism push shares to record high
For the September quarter, Amazon reported adjusted earnings per share of $1.95, far exceeding Wall Street’s $1.57 consensus estimate.
Revenue reached $180.2 billion, ahead of expectations of $177.9 billion, with strong contributions from cloud and advertising.
The company guided fourth-quarter revenue between $206 billion and $213 billion, compared with analysts’ $208.4 billion forecast.
The strong results sent Amazon stock up as much as 14% during trading, reaching $250.50—a new record high.
Analysts remained optimistic about further upside, with UBS raising its price target to $279, citing opportunities across e-commerce, cloud, advertising, and its satellite project, Kuiper.
Despite lagging the broader tech sector for most of the year, Amazon’s latest performance has repositioned it as a frontrunner in the AI and cloud race.
With AWS growth reaccelerating and investors regaining faith in management’s execution, the company appears poised for a stronger finish to 2025.
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