Amazon Shares Jump After Third-Quarter Results Exceed Wall Street Targets

Amazon.com reported stronger-than-expected third-quarter results on Thursday, sending the stock up more than 13% in after-hours trading. The company topped analyst projections for earnings, revenue and cloud-computing growth, while issuing an outlook for the holiday period that also came in above consensus estimates.

Profit and sales surpass forecasts

For the three months ended Sept. 30, the Seattle-based technology and retail group posted earnings of $1.95 per share, well ahead of the $1.57 average estimate compiled by LSEG. Net sales reached $180.17 billion, beating the predicted $177.8 billion. The company’s operating income, buoyed by cost controls and higher cloud margins, totaled $11.2 billion, compared with $2.5 billion in the prior-year period.

AWS growth accelerates

The performance of Amazon Web Services (AWS) drew particular attention. Revenue in the cloud unit rose 20.2% year over year to $33 billion, outpacing the $32.42 billion estimate and marking its fastest expansion since 2022. AWS remains the largest provider of cloud infrastructure, but faces intensifying competition from Google Cloud, which grew 34% in the same quarter, and Microsoft Azure, which advanced 40%.

Chief Executive Officer Andy Jassy said AWS is “growing at a pace we haven’t seen since 2022” and highlighted ongoing demand for artificial-intelligence services. Over the past 12 months Amazon has added more than 3.8 gigawatts of data-center capacity to support AI workloads, according to the company.

AI investments and new data center

Amazon intensified its focus on generative AI during the quarter. On Wednesday it opened Project Rainier, an $11 billion data-center complex designed to run models from Anthropic, creator of the Claude chatbot. The company also introduced Q, a conversational assistant for business customers, and Bedrock, a service that lets developers build generative AI applications on AWS. In retail, the shopping chatbot Rufus has been used by 250 million shoppers this year, with Amazon reporting that 60% of users are more likely to complete a purchase after interacting with the tool.

Advertising and e-commerce units expand

Advertising services generated $17.7 billion, exceeding the anticipated $17.34 billion. Revenue from Amazon’s core online stores segment climbed 10% year over year, benefiting from steady consumer demand despite global economic uncertainty and fluctuating trade policies. The company said previously that higher tariffs had not materially affected pricing or shopper behavior.

Imagem: Internet

Guidance signals solid holiday quarter

Looking ahead to the current quarter, which includes the critical holiday shopping season, Amazon projected net sales of $206 billion to $213 billion. The midpoint of $209.5 billion surpasses the $208 billion analysts expected. Management forecast operating income between $21 billion and $26 billion, compared with the Wall Street consensus of $23.8 billion.

Cost reductions continue

While channeling significant capital into AI, Amazon is pressing ahead with cost-cutting measures in other parts of the organization. Earlier this week the company said it would eliminate 14,000 corporate roles to streamline operations and speed decision-making. Headcount at the end of the quarter stood at roughly 1.58 million, a 2% increase from a year earlier.

Market reaction and year-to-date performance

The upbeat report triggered an immediate rally in Amazon’s shares, which had risen about 1.6% for the year through Thursday’s close. The after-hours gain of more than 13% narrowed the stock’s gap with other large-capitalization technology names that have outperformed in 2024.

Crédito da imagem: CNBC