Amazon Cloud Surge Offsets Weaker Retail Business as AI Spending Rises

Amazon delivered a robust third quarter, beating analyst expectations as its cloud computing division gave the company a significant boost. Despite waning strength in its retail operations amid growing uncertainty around global trade and consumer confidence, Amazon Web Services AWS reported a remarkable yearon-year revenue increase of twenty per cent.

Revenue for AWS in the three months to September climbed ahead of analysts forecasts, reaching a growth rate not seen since 2022 and outpacing estimates of an eighteen per cent rise. Net income across the company soared to twentyone point two billion dollars compared to fifteen point three billion dollars in the same quarter last year, underpinning the firm’s reliance on its cloud category for profitability.

Shares in the ecommerce leader responded positively, jumping nearly ten per cent in afterhours trading in New York and reflecting renewed investor appetite. Amazon is projecting fourthquarter net sales between two hundred and six and two hundred and thirteen billion dollars, slightly above analyst expectations.

Cloud computing now accounts for just over fifteen per cent of Amazon’s total revenue but is the company’s primary profit generator, responsible for around sixty per cent of total operating income. According to chief executive Andy Jassy, artificial intelligence is catalysing meaningful gains across the entire business, with AWS seeing accelerated momentum fuelled by this technological shift.

This performance aligns Amazon with the broader Big Tech landscape where major players such as Microsoft Google and Meta Platforms are funnelling substantial capital into chips and datacentres to capitalise on surging AI demand. Meanwhile, Amazon’s e-commerce arm enters the holiday season on less certain footing, with shaky consumer sentiment casting a shadow over retail sales projections.

Yet the company’s cloud unit is undoubtably shining. With AI investment at the heart of its resurgence, AWS is underpinning Amazon’s prospects even as its traditional retail business faces new headwinds.