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Amazon Soars on Fastest Cloud Growth in Years
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October 31, 2025
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October 31, 2025
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5:05Now PlayingDan Ives, Global Head of Tech Research at Wedbush Securities, give his take on the week's megacap tech earnings.
Amazon.com Inc. posted robust cloud growth that reassured investors that the tens of billions of dollars the company and its peers are pouring into artificial intelligence will pay off.
In the third quarter, Amazon Web Services generated $33 billion in revenue, a 20% increase from a year earlier, the company said in a statement on Thursday. The gain exceeded the 18% growth that analysts had expected and marked the biggest year-over-year rise since OpenAI’s ChatGPT came on the scene in late 2022.
The results reinforce the logic that major technology companies such as Microsoft Corp. and Alphabet Inc.’s Google have been using to justify record spending levels on data center construction — that demand for AI is outstripping the supply of global computing capacity.
Amazon’s results came a day after investors punished Meta Platforms Inc. for projecting even greater spending in 2026. Unlike Microsoft and Google, Meta isn’t a major cloud-computing provider to outside customers. That means its spending spree could be riskier.
Amazon’s shares jumped 12% to $249.42 as the markets opened in New York on Friday, the biggest intraday jump since April. The stock’s performance had lagged behind that of its industry peers this year, with investors worrying that the company has yet to demonstrate enough benefit from its artificial intelligence products. In its most recent quarter, Microsoft’s Azure cloud business grew at almost twice the rate of AWS, while Google Cloud posted 33.5% growth.
“Clearly AWS continues to drive the bus here, with acceleration in growth and better-than-expected operating margin,” analysts with William Blair said in a research note after earnings. “The acceleration helps ease some of the narrative around the company’s lack of strategic vision or advantage in the emerging AI landscape.”
Chief Executive Officer Andy Jassy has pushed the company’s capital spending to a record in the quarter to keep up in an arms race with its biggest rivals.
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