Amazon has made its first financial disclosures since the disastrous outage suffered by its cloud computing division that brought everything from smart beds to banks offline.
Despite the global outage, Amazon Web Services has continued to grow, and this quarter reported a 20% increase in revenue year over year. Wall Street estimated that AWS would bring in $32.42bn in net sales in the third quarter, with the company reporting actual revenue of $33bn.
“AWS is growing at a pace we haven’t seen since 2022,” CEO Andy Jassy said in a statement accompanying the earnings report.
The strong third-quarter earnings, which exceeded analysts’ expectations, led the company’s stock to spike up about 9% in after-hours trading.
The earnings report highlighted Amazon’s desire to compete with other companies that have managed to capitalize more aggressively on the AI boom. Amazon’s stock has lagged behind some rivals in big tech, and its e-commerce business has been more susceptible to the effects of the Trump administration’s sweeping and unpredictable tariff policies than firms more focused on software.
The tech company, worth some $2.4tn, revealed that it easily beat Wall Street expectations through growth in its cloud computing services. Market analysts had predicted that Amazon would report $1.58 earnings per share and a net sales revenue of $177.82bn. The company reached $180.17bn in revenue and $1.95 earnings per share.
AWS has faced increasing competition from alternative providers such as Google Cloud and Microsoft Azure, with the latter’s partnership with OpenAI and reports of strong growth in its cloud business driving up its share price.
Yet AWS is still a backbone of much of the modern internet, with an inadvertent show of its power taking place earlier this month when a glitch in the company’s cloud computing took websites, apps, tech products and critical communications systems, such as electronic hospital records, offline. The outage affected millions of people and lasted hours, underscoring how reliant many parts of everyday life are on Amazon’s products.
During the earnings call, Amazon’s executives touted the incorporation of AI tools such as the Rufus shopping assistant into its platforms and services. They also mentioned efforts to grow its Zoox robotaxi business, stating that they would begin testing the autonomous driving service in Washington DC later this year.
At Amazon headquarters, the company confirmed plans earlier this week to lay off 14,000 corporate workers, while further job cuts are expected throughout the company. The tech company publicly announced the cuts in a post on its website titled “Staying nimble and continuing to strengthen our organizations”, which referenced advancements in AI and claimed the company wanted to “operate like the world’s largest startup”.
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“What we need to remember is that the world is changing quickly,” Amazon’s post stated. “This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before.”
Jassy suggested in a blog post earlier this year that the company’s investments in AI would mean that Amazon needs “fewer people doing some of the jobs that are being done today”.
On the investor call, however, Jassy denied that the mass layoffs were driven by AI and instead claimed that they were a result of “culture”, saying the company was trying to emphasize a more malleable, startup-style operation.
“The announcement that we made a few days ago was not really financially driven, and it’s not even really AI-driven, not right now. It really is culture,” Jassy said.
