AWS exceeds Wall Street’s expectations as demand for cloud infra remains high

Amazon’s cloud infrastructure service, Amazon Internet Companies (AWS), is on observe to file its strongest 12 months of progress in three years, fueled by the AI business’s unprecedented demand for computing energy.

AWS is rising 20% year-over-year and ended the third quarter with $33.1 billion in gross sales by means of the primary 9 months of the 12 months, Amazon introduced in its third-quarter earnings launch on Thursday. The enterprise section’s working earnings elevated to $11.4 billion in Q3, up from $10.4 billion on the identical level in 2024.

“AWS is rising at a tempo we haven’t seen since 2022, re-accelerating to twenty.2% YoY,” Andy Jassy, the president and CEO of Amazon, mentioned within the firm’s earnings announcement. “We proceed to see sturdy demand in AI and core infrastructure, and we’ve been centered on accelerating capability — including greater than 3.8 gigawatts previously 12 months.”

AWS launched an infrastructure area in New Zealand through the quarter and has three extra areas within the pipeline.

The cloud infrastructure supplier additionally secured a number of new offers in Q3 throughout quite a lot of industries, together with a couple of notable names within the AI market. In July, AWS partnered with Perplexity to launch the AI browser firm’s enterprise product. AWS additionally partnered with Cursor through the third quarter.

The extraordinary infrastructure calls for of AI have additionally been a boon to AWS’s rivals. OpenAI and Oracle allegedly inked a large $300 billion cloud compute deal in September that may begin in 2027. The pair additionally made a deal for OpenAI to pay Oracle $30 billion a 12 months for information middle companies. Final week, Google and Anthropic introduced a cloud deal value tens of billions of {dollars}.

These large offers come regardless of skepticism of how a lot cloud infrastructure will truly be wanted sooner or later and if the business is heading into bubble territory. Nonetheless, it does is smart for cloud firms like AWS to benefit from a market the place clients are prepared to pay large sums for his or her companies.

“You’re going to see us proceed to be very aggressive in investing capability as a result of we see the demand,” Jassy mentioned about investing in AI infrastructure. “As quick as we’re including capability proper now, we’re monetizing it.”

This information comes two days after Amazon introduced it was slashing 14,000 company jobs, because it appears to take a position extra in its AI technique.