Amazon’s cloud-computing division posted stronger-than-expected third-quarter results, with revenue reaching $45.98 billion and representing a 39% increase compared to the prior year. This performance exceeded the $45.29 billion consensus estimate from analysts surveyed by StreetAccount. The growth rate marked an acceleration from the prior quarter’s approximately 37% expansion and represented the fastest growth rate for the unit since the fourth quarter of 2021.
Amazon CEO Andy Jassy highlighted robust underlying metrics during discussions with analysts, noting that core compute and storage revenue expanded at rates not seen in several years. The AWS segment’s operating income climbed to $17.77 billion, up 55% year-over-year and surpassing the $16.97 billion consensus projection. The cloud unit now represents nearly 23% of Amazon’s total revenue, a record proportion.
Competitive dynamics in cloud infrastructure have intensified as major players race to build data center capacity to support artificial intelligence applications. Alphabet reported that its Google Cloud business, which includes infrastructure and Google Workspace subscriptions, more than doubled during the quarter. Microsoft disclosed Azure revenue that is now 72% the size of AWS, an increase from 58% two years prior. AWS maintained its position as the largest cloud provider by revenue.
Investment in AI infrastructure has driven strategic actions across the sector. During the quarter, AWS announced plans to expand its portfolio of Nvidia graphics processing units for AI workloads, acquired data analysis startup DuckLabs, and established partnerships with Meta and OpenAI. The company indicated plans to make its Trainium chips for model training available to external customers beginning late in 2027, following a similar strategy adopted by Google with its tensor processing units.
Jassy indicated confidence in sustained momentum, projecting that AWS could achieve growth exceeding 40% in each of 2027 and 2028, with the division potentially reaching $1 trillion in annual revenue within five to ten years.
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