AWS Grows 39% as Amazon Holds a $220B Spending Plan

Amazon Web Services, the largest cloud provider in the world, grew 39% to $46.0 billion in the three months to September, up from $33.0 billion a year earlier, Amazon said on 29 October. That was slightly above the $45.47 billion analysts had expected, according to FactSet figures cited by Invezz, and the fastest growth in nearly five years. AWS made an operating profit of $17.8 billion.

The rest of the report disappointed investors. Amazon's total revenue rose 12% to $201.9 billion, just short of the roughly $202.2 billion analysts expected, and earnings per share fell to $1.89 from $1.95 a year earlier, against forecasts of about $1.97, Invezz reported. Last year's profit included a $9.5 billion pretax gain on Amazon's investment in Anthropic. Amazon's shares fell in after-hours trading and opened lower on Friday, Beinsure reported, on a day the Nasdaq fell more than 2%.

Related · InnovationMicrosoft's Azure Grows 48% to $33.2 BillionMicrosoft beat forecasts as its cloud kept growing faster than it can add capacity, and spent $45.2 billion in a quarter, mostly on chips.

The spending question

Amazon spent $77.3 billion on property and equipment in the quarter, more than double the $35.1 billion of a year earlier, according to its results as reported by StockTitan. Over the past 12 months its free cash flow was an outflow of $42.4 billion, which Amazon said mainly reflects AI investment. Chief executive Andy Jassy said Amazon expects to "spend more meaningfully in 2027", according to Beinsure.

Jassy defended the bill. "Our AWS investment in functionality and infrastructure is working," he said in the results statement, adding: "There has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years." He said AWS is now running at about $184 billion a year and that Amazon expects AWS revenue to grow by more than 40% in both 2027 and 2028, StockTitan reported.

• Amazon's online store sales rose 2% to about $68.5 billion, and advertising revenue grew 12% to $19.6 billion.
• For the October to December quarter, Amazon forecast revenue of $240 billion to $247 billion, a midpoint slightly below analyst expectations, according to Beinsure.
• AWS remains the largest cloud by revenue, but Microsoft's Azure grew 48% to $33.2 billion and Google Cloud grew 103% to $30.7 billion in the same quarter, StockTitan noted.

The results close a week in which investors judged Big Tech's AI bills very differently: Microsoft's shares rose after Azure grew 48%, while Alphabet lost about $460 billion in market value after raising its spending.