Amazon's Third Quarter Sales, Outlook Beat Estimates, Shares Climb 10%
$Amazon.com(AMZN)$
Net sales rose 13% to $180.17 billion in the three months ended Sept. 30 , surpassing Bloomberg consensus that called for $177.82 billion. Sales of Amazon Web Services jumped 20% to $33.01 billion, exceeding the average estimate of $32.39 billion. That's the fastest growth for AWS in almost three years, according to data compiled by Bloomberg.
For the fourth quarter ending in December, the company expects net sales to rise $206 billion to $213 billion. The midpoint of that outlook, $209.5 billion, is higher than the $208.45 billion that analysts were expecting, according to the average of estimates compiled by Bloomberg.
"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 a press release after the market closed Thursday. “AWS is growing at a pace we haven't seen since 2022, re-accelerating to 20.2% YoY. We continue to see strong demand in AI and core infrastructure, and we've been focused on accelerating capacity – adding more than 3.8 gigawatts in the past 12 months."
Operating income was seen ranging between $21 billion to $26 billion, compared with $21.2 billion in the fourth quarter of 2024, the company said. The midpoint of that forecast is below the $23.78 billion expected by analysts.
Earnings rose to $1.95 a share in the third quarter, from $1.43 a year earlier. That surpassed Bloomberg consensus by more than 23%, the 12th straight quarter that Amazon beat EPS expectations.
The company said its custom AI chip Trainium2, has become a multi-billion-dollar business, growing 150% quarter over quarter amid continued strong adoption. The company also outlined a long list of highlights of its AI progress, including the deployment of AI, including Grew Connect, an AI solution that that has reached $1 billion annualized revenue run rate business in recent weeks, with 12 billion minutes of customer interactions being handled by AI in the last year.
Before Amazon's results were released, its options market was implying a 7.5% move in the share price up or down when the market resumes regular trading Friday. Shares of $Microsoft (MSFT.US)$, a rival in cloud services, saw its shares slipped 2.9% Thursday after capital expenditures exceeded analysts' estimates, heightening the debate over potential overspending in artificial intelligence.
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