Amazon profit dips but cloud biz accelerates

Amazon's profit declined in the third quarter, yet its cloud division, Amazon Web Services (AWS), experienced a surge in growth. The company disclosed its financial results on Thursday, revealing that net income fell to $20.69 billion, or $1.89 per share, from $21.19 billion, or $1.95 per share, in the previous quarter. However, net sales escalated by 12 percent to $201.94 billion.

The reduction in net income was primarily due to the absence of $9.5 billion in pre-tax gains from Amazon's investment in Anthropic, which had previously boosted results in the year-ago quarter. Operating income, on the other hand, rose significantly by 61 percent to $28.08 billion, up from $17.41 billion in the prior year.

Cloud sales experienced a notable increase of 39 percent to $45.98 billion, while AWS operating income grew to $17.77 billion from $11.43 billion. This success in the cloud business led Amazon Web Services' President and CEO Andy Jassy to assert that the company's investment in functionality and infrastructure was paying off. He projected revenue growth rates of over 40 percent for AWS both in 2027 and in 2028.

Jassy highlighted the company's broader product selection and faster delivery as key factors enabling them to capture a larger segment of the retail market with improving margins. Additionally, newer businesses such as grocery, pharmacy, Amazon Leo, and Zoox were advancing promisingly. He expressed confidence in Amazon's potential to become a trillion-dollar revenue business within the next 5-10 years.