SEATTLE (Oct 30, Market Insider) – Amazon shares skyrocketed 14% in after-hours trading on Wednesday, adding roughly $330 billion to its market value, after the company’s cloud business posted its fastest growth in nearly three years and forecast sales that exceeded Wall Street expectations.
The results signal a strong rebound for Amazon’s cloud division, Amazon Web Services (AWS), which reported a 20% jump in revenue for the third quarter — outpacing the estimated 18% and marking its best performance since 2022. The surge comes as businesses worldwide continue to pour money into artificial intelligence infrastructure, fueling demand for the massive computing power AWS provides.
AI Wave Restores Amazon’s Momentum
After lagging behind peers in the AI race, Amazon is now catching up fast. CEO Andy Jassy declared that AWS growth “is at a pace we haven’t seen since 2022,” highlighting soaring demand for both AI and core infrastructure services. “We’ve been focused on accelerating capacity,” he added.
The renewed optimism pushed Amazon’s shares toward what could become its biggest one-day rally since 2015 if momentum holds through Friday’s trading session.
The company projected fourth-quarter net sales between $206 billion and $213 billion, surpassing analysts’ forecasts of $208 billion, according to LSEG data. Advertising revenue also shone, climbing 24% to $17.7 billion, thanks to new ad formats across Echo devices and smart grocery carts.
A Capital Spending Supercycle
Chief Financial Officer Brian Olsavsky said Amazon’s capital expenditures will reach around $125 billion this year and increase further in 2026, driven by heavy investment in AI data centers and chips. AWS alone accounts for about 15% of total sales but delivers 60% of operating income, making it Amazon’s most profitable division.
Amazon’s performance follows stellar results from Microsoft Azure and Google Cloud, which also reported double-digit growth and boosted their own AI spending. Together, the Big Tech giants are leading an unprecedented capital wave into AI infrastructure — from custom semiconductors to next-generation data centers.
AI Spending Frenzy Spurs Big Tech Arms Race
Despite warnings from some on Wall Street about a potential AI bubble, Jassy joined fellow CEOs in asserting that the investments are backed by tangible revenue. “We can continue to grow and click like this for a while,” he said, pointing to strong momentum in both advertising and retail.
Federal Reserve Chair Jerome Powell, commenting on the broader AI boom, said he does not view it as a speculative frenzy akin to the dot-com bubble. “Today’s AI leaders actually have earnings,” he noted, emphasizing that AI-related infrastructure is now a major driver of U.S. economic growth.
Restructuring and Regulatory Headwinds
Even amid record earnings, Amazon is still trimming costs and flattening management layers. The company recently announced 14,000 corporate layoffs, part of a larger restructuring that could ultimately cut 30,000 jobs, though Jassy said the decision was “not financially or AI-driven, but cultural.”
Amazon also recorded a $25 billion settlement charge to resolve a U.S. Federal Trade Commission case related to misleading Prime subscription practices.
Outlook: From E-commerce to AI Powerhouse
As global consumer sentiment remains shaky ahead of the holiday season, Amazon’s reliance on cloud computing and AI innovation appears to be paying off. The company’s transformation from an e-commerce titan into an AI and infrastructure powerhouse is accelerating — and investors are clearly taking notice.
If the current rally continues, Amazon could post one of the largest single-session market cap gains in modern Wall Street history, reinforcing its status not just as a retailer, but as a central player in the world’s AI-driven future.
