- Amazon stock reached a new all-time high after surpassing earnings expectations in the latest quarter.
- Amazon Web Services (AWS) grew revenue by 20% and contributed two-thirds of Amazon’s operating profit.
- Amazon’s digital advertising revenue increased by 24%, reaching $17.7 billion.
- Total sales rose 13% to $180.17 billion, beating analyst estimates of $177.8 billion.
- Amazon plans to increase capital spending to $125 billion in 2025, focusing heavily on Artificial Intelligence (AI).
Amazon (AMZN) shares climbed over 11% on Friday after the company reported earnings that exceeded forecasts for the third quarter. The company posted earnings per share of $1.95, surpassing the average analyst estimate of $1.57.
The company’s total revenue for the quarter reached $180.17 billion, up 13% from a year earlier and above the expected $177.8 billion. Amazon Web Services (AWS), the company’s cloud computing division, drove much of this growth, increasing revenue by 20% year-over-year. AWS generated $11.4 billion in operating income, representing about two-thirds of Amazon’s total operating profit.
Amazon’s digital advertising segment also saw strong growth, with revenue jumping 24% to $17.7 billion. CFO Brian Olsavsky noted that the company has raised its capital expenditure forecast for 2025 to $125 billion from an earlier estimate of $118 billion, with a further increase expected in 2026, focusing primarily on investments related to artificial intelligence.
“There was definitely concern about AWS losing market share to Microsoft Azure and Google Cloud … But now AWS is aboard the train as well and they’re seeing a big revenue increase,” said Jed Ellerbroek, portfolio manager at Argent Capital, who also raised his price target for AMZN stock. At the time of reporting, shares of Amazon traded at an all-time high near $245. Analysts’ price targets range from $248 to $305, with firms like Wedbush and Cantor Fitzgerald assigning a $280 target.
For further insight, see Don’t Bet Against Amazon: Expert Sees 35% Rally Ahead to $306.
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