Amazon Stock Soars After Q3 Results Highlight Cloud Growth
Amazon’s stock experienced a significant surge following the release of its third-quarter results, which exceeded Wall Street expectations. The company reported an adjusted earnings per share of $1.95 for the quarter ending in September, marking a 33% increase year-over-year and surpassing analyst predictions of $1.57.
Strong Sales Growth
Revenue for the quarter rose 13% to $180.2 billion. Analysts had anticipated sales of approximately $177.91 billion. A key contributor to this growth was Amazon Web Services (AWS), the company’s cloud division, which saw a notable 20% increase in sales, reaching $33 billion. This also exceeded analysts’ expectations of $32.4 billion.
CEO’s Insights on Business Momentum
In a press release, Amazon’s CEO, Andy Jassy, highlighted the strong momentum across the company, attributing improvements to artificial intelligence initiatives. He noted, “AWS is growing at a pace we haven’t seen since 2022.” The company has also focused on increasing capacity, recently adding over 3.8 gigawatts in the last year.
Investors have been eager for AWS growth to return to above 20%. Most analysts did not predict this would occur before 2026. The robust AWS performance may alleviate concerns that Amazon is losing its dominant position in the cloud market to competitors like Microsoft and Alphabet.
Future Guidance and Stock Performance
Looking ahead, Amazon provided guidance for the fourth quarter, expecting sales of approximately $209.5 billion, with an operational income target of $23.5 billion. Prior analyst estimates projected revenues of $208.41 billion and operational income of $23.8 billion.
Following the earnings announcement, Amazon’s stock climbed over 10% to $246.71 in after-hours trading. Despite this uptick, the stock had fallen roughly 2% during regular trading hours prior to the earnings report, and year-to-date performance shows a modest gain of 2.2%, considerably lagging behind the S&P 500’s 16% rise.
Market Position and Ratings
- Amazon stock is currently held within a cup base pattern, with a buy point at 238.85.
- The IBD Composite Rating for Amazon stands at 89 out of 99, indicating competitive performance.
As the market continues to evolve, Amazon’s quarterly results and projections indicate a potential reinvigoration in growth, primarily driven by its cloud services division.
