Amazon Targets AI Race After Cloud Division’s 20% Growth Fuels Q3 Beat

Amazon’s third-quarter earnings beat was decisive, with $180.17bn in revenue and $1.95 EPS, but the company’s focus is clearly on the next battle: artificial intelligence. The strong financials, which sent the stock up 9%, were driven by the company’s cloud computing backbone.
Amazon Web Services (AWS) grew 20% year-over-year to $33bn, its fastest pace since 2022. This performance gives Amazon a strong foundation as it invests in AI to compete with Google and Microsoft, whose AI efforts have excited investors.
On the earnings call, executives promoted the integration of the Rufus AI shopping assistant and the expansion of the Zoox robotaxi business. This is part of Amazon’s strategy to demonstrate it can capitalize on the AI boom.
The strong quarter for AWS came despite a major global outage that recently took down services for millions. The incident underscored AWS’s critical role in the internet’s infrastructure, which its revenue now reflects.
The company also confirmed 14,000 corporate layoffs this week. While a blog post cited AI, CEO Andy Jassy told investors the cuts were “culture-driven,” not financially or AI-driven, in a bid to make the company “nimble.”