Amazon Web Services (AWS) reported third-quarter revenue of $45.98 billion, surpassing the $45.29 billion consensus forecast from analysts. This marks a significant increase from the 37% growth seen in the previous quarter and is the highest growth rate since Q4 2021. CEO Andy Jassy highlighted that core compute and storage revenue grew at their fastest rates in several years.
Despite AWS's leading position in cloud revenue, competitors like Alphabet and Microsoft are also experiencing rapid growth. Alphabet's Google Cloud reported more than doubling its revenue in the same quarter. All major cloud providers are expanding their data center capabilities to meet rising demand for artificial intelligence services.
AWS announced plans to enhance its offerings with Nvidia graphics processing units and made strategic acquisitions, including data analysis startup DuckLabs, while also partnering with Meta and OpenAI. AWS generated $17.77 billion in operating income, exceeding the $16.97 billion consensus, and now represents nearly 23% of Amazon's total revenue.
Jassy expressed confidence in AWS's future growth, projecting it could exceed 40% in 2027 and 2028, potentially reaching a trillion-dollar revenue business within the next five to ten years. Additionally, Amazon plans to make its Trainium chips available outside of AWS by late 2027, following a similar strategy to Google’s AI offerings