In a strong showing, Amazon recorded a net income of $15.3 billion, significantly higher than the $12.21 billion estimated by industry analysts surveyed by FactSet. This marks a notable increase from the $9.9 billion earned in the same quarter last year. The company’s earnings per share stood at $1.43, well above the anticipated $1.14.
The report comes just in time for the retail industry’s busiest period, with the holiday shopping season approaching. Amazon’s CEO, Andy Jassy, expressed excitement about the company’s prospects as they gear up for the holidays. “As we head into the holiday season, we’re excited about what we have for customers,” he stated. “We kicked off the holiday season with our largest Prime Big Deal Days and the launch of an all-new Kindle lineup, which has been performing significantly better than our expectations, with much more to come.”
Looking ahead, Amazon anticipates fourth-quarter revenues to fall between $181.5 billion and $188.5 billion, slightly below the analysts’ average forecast of $186.29 billion. This upbeat earnings report comes after the company fell short of revenue estimates in the previous quarter.
Amazon’s core online retail segment brought in $61.41 billion during the third quarter, which includes sales from the highly popular Prime Day shopping event held in July. Although the company did not disclose the specific revenue generated from this 48-hour shopping event, it reported record sales with more items sold than ever before.
Earlier this month, Amazon hosted another discount shopping event for Prime members, a strategy it introduced two years ago to boost holiday sales. Revenue from this event will be included in the fourth-quarter earnings report.
The company’s results follow earnings reports from other tech giants like Microsoft, Meta, and Alphabet, Google’s parent company.
Amazon Web Services (AWS), the company’s cloud computing division and a key driver of its artificial intelligence ambitions, recorded a 19% sales increase, generating $27.5 billion in revenue. This growth is attributed to Amazon’s ongoing investments in data centers, AI chips, and essential infrastructure to support its technological capabilities.
During a media briefing in August, Amazon’s Chief Financial Officer Brian Olsavsky indicated that the company had spent over $30 billion on capital expenditures in the first half of the year, primarily on AWS infrastructure, with expectations of increased investment in the latter half of the year.
This month, Amazon also announced plans to invest in small nuclear reactors, following a similar announcement from Google, as both tech giants seek new sources of carbon-free power to meet the growing demand for data centers and generative AI. Additionally, last month, Amazon secured a multi-year agreement with chipmaker Intel to develop custom AI chips for AWS.
Capital expenditures for Amazon soared from $12.48 billion year-over-year to $22.62 billion, driven by investments in technology infrastructure, including data centers and NVIDIA GPUs used for AI.
During a earnings call on Thursday, Jassy noted that Amazon is utilizing generative AI “extensively” across its businesses, including AI-powered shopping initiatives in parts of Europe, Canada, and the United States. The company recently launched an AI shopping guide for consumers, designed to assist customers in finding products, along with an AI assistant that provides tailored business insights to boost productivity and vendor growth.
Jassy conveyed to investors that significant upfront investments in data centers, networking gear, and hardware are necessary for both AWS and AI advancements. He emphasized that many of these assets—such as data centers—could remain beneficial for decades.
“This represents an unusually large opportunity, perhaps a once-in-a-lifetime chance,” he said, adding that he believes customers, businesses, and shareholders will appreciate the long-term potential as Amazon aggressively pursues this path.
Regulatory scrutiny is ongoing regarding Amazon’s partnerships with AI startups, including Anthropic, which is using AWS and the company’s custom chips for building, training, and deploying its AI models. In September, Amazon received good news when British competition authorities approved its partnership with Anthropic.
However, relationships like these, along with others, are under investigation by the Federal Trade Commission (FTC) in the U.S. Led by Big Tech critic Lina Khan, the FTC has filed an antitrust lawsuit against Amazon, accusing the company of stifling competition on its e-commerce platform and charging excessive fees to sellers.
