This was after strong growth at its cloud unit, and a bullish sales outlook eased fears that the tech giant was falling behind rivals in the artificial intelligence (AI) race.
Revenue at Amazon Web Services (AWS), the hub of the company’s recent AI investments, rose 20% in the third quarter. Although Microsoft Azure’s revenue increased by 40% and Google Cloud’s by 34%, AWS’s sheer scale magnifies its growth impact.
Its $33 billion cloud revenue is more than double that of Google’s $15.16 billion. Wall Street cheered AWS’s comeback, with analysts noting the earnings marked a potential turning point for Amazon.
“There was definitely concern about AWS losing market share to Microsoft Azure and Google Cloud. Now AWS is aboard the train as well and they’re seeing a big revenue increase,” said Jed Ellerbroek, Portfolio Manager at Argent Capital.
Ellerbroek said investors were expecting an AWS boost in the fourth quarter or early next year. “But it’s already come this quarter,” he said.
Up until Friday’s stock surge, Amazon shares had risen just 1.6% so far this year due to market share worries and a lack of solid AI updates, making the company the worst performer in the “Magnificent Seven” group of tech giants.
–Reuters–
