Amazon’s cloud-computing division posted third-quarter revenue of $45.98 billion, representing 39% year-over-year growth and surpassing the $45.29 billion consensus forecast from StreetAccount-polled analysts. The growth rate represented an acceleration from the prior quarter’s approximately 37% increase and marked the strongest expansion rate since the fourth quarter of 2021.
Chief Executive Andy Jassy highlighted that core compute and storage revenue reached their fastest growth rates in several years. The AWS segment generated $17.77 billion in operating income during the quarter, up 55% compared to the $16.97 billion StreetAccount consensus. AWS now represents nearly 23% of Amazon’s total revenue, the largest proportion to date.
Amazon retains leadership in cloud computing by revenue, though competitive dynamics have shifted. Alphabet’s Google Cloud business more than doubled during the third quarter, while Microsoft disclosed that Azure had grown to 72% of AWS’s size, up from 58% two years prior. Major cloud providers have been engaged in capacity expansion to meet artificial intelligence demand, with AWS announcing expanded Nvidia graphics processing unit availability for AI workloads during the period.
During the quarter, AWS acquired data analysis startup DuckLabs and secured partnerships with Meta and OpenAI. Looking ahead, Jassy indicated confidence in AWS achieving growth above 40% annually during 2027 and 2028, with aspirations to become a trillion-dollar revenue business within the next five to 10 years. The company also announced plans to make its Trainium chips for AI model training available outside AWS starting in late 2027, following a similar strategy employed by Google with its tensor processing units.
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