Amazon stock soars 13% as earnings, cloud growth power shares

Amazon stock rose sharply in premarket trading Friday, driven by third-quarter earnings that beat Wall Street expectations across the board and assuaged investor concerns about the company’s cloud business.

The e-commerce and tech giant on Thursday posted $180.2 billion in revenue, a $1.95 EPS, and 20% growth in Amazon Web Services (AWS) — its strongest pace in more than a year. Revenue was up 13% from a year earlier, profit came in above expectations, and guidance for the holiday quarter was steady to slightly higher.

Amazon stock was up more than 13% before markets opened Friday, poised for a $300 billion market cap rally. If that gain holds through Friday’s session it would be the stock’s strongest day since early 2022, according to MarketWatch.

After months of anxiety over whether Amazon could keep up with Microsoft and Google in the cloud race, the company finally put a number to its answer. AWS’ 20% revenue jump to $33 billion marked its fastest growth in more than a year and came in above analysts’ expectations of around 18% — a relief to investors who had watched Microsoft’s Azure and Google Cloud pull away. While both Microsoft and Alphabet reported stronger cloud numbers yesterday — Azure grew by 40%, and Google Cloud by 34% — this quarter, the gap narrowed. Analysts had been treating 20% as the magic number for the stock’s comeback story.

Amazon’s answer wasn’t just price cuts or contracts — it was scale. And that scale is the story. This year, the company has poured around $100 billion into data-center build-outs and chip capacity, adding 3.8 gigawatts of power and expanding its in-house silicon lineup — the kind of build-out that makes its cloud business look less like a software unit and more like a national utility. The company said its custom Trainium2 chips are fully subscribed and that its Project Rainier cluster — roughly half a million accelerators built for Anthropic — is already under construction.

“We continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business,” CEO Andy Jassy said in the press release. “AWS is growing at a pace we haven’t seen since 2022.” On the earnings call, Jassy said AWS had increased capacity in the quarter and plans to double capacity by 2027, with rising customer interest in Trainium.

Analysts were quick to recalibrate. Ethan Feller, stock strategist at Zacks Investment Research, said in a note that this “banner” quarter could be “a turning point for investment sentiment and set the stage for Amazon to reclaim a leadership role among large-cap tech stocks heading into year-end.”