Amazon shares jump 13% in extended trading after cloud business grows fastest since 2022

Amazon.com Inc. saw shares jump by 13% in extended trading on Thursday, October 30, after its third quarter results surpassed expectations led by strong growth in its cloud computing unit.

The company reported revenue of $180.1 billion, higher than the $177.8 billion that analysts had projected. Its Earnings Per Share (EPS) of $1.95 was also higher than the $1.57 estimated by Wall Street analysts.

Amazon Web Service (AWS), the company's cloud computing business saw revenue of $33 billion, higher than the $32.42 billion estimated. The cloud unit grew by 20.2% from the same quarter last year, while analysts had projected growth of 18.1%. CEO Andy Jassy said that this is the fastest pace of growth that the unit has seen since 2022.

However, despite growth being the fastest in over three years, it still lagged its much larger peer-service providers, Google and Microsoft, whose respective cloud businesses grew by 34% and 40% during the quarter.

Amazon also raised its capex guidance for the rest of the year to $125 billion from $118 billion earlier and CFO Brian Olsavsky expects that number to increase in 2026.

The company expects sales to cross $200 billion in the fourth quarter, with the guidance mid-point of $209.5 billion being higher than the $208 billion estimate.

CEO Jassy also addressed the recent layoff of 14,000 employees during the earnings call, stating that the announcement was not "financially driven" or due to AI, "at least right now."

“It really it’s culture,” Jassy said. “If you grow, as fast as we did for several years, you know, the size of the businesses, the number of people, the number of locations, the types of businesses you’re in, you end up with a lot more people than what you had before, and you end up with a lot more layers.”

Shares of Amazon are trading 13% higher afterhours at $251.57. In case the gains hold in regular trading on Friday, the stock will open at a 52-week high.