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Amazon AWS posts 39% revenue growth as cloud rivals also accelerate

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In short

The cloud division generated $45.98 billion in third-quarter revenue while operating income surged 55% to $17.77 billion, outperforming analyst consensus. This growth surge helped the unit comprise nearly 23% of its parent company's aggregate top line. To defend its market share against fast-growing competitors, the company acquired startup DuckLabs and secured new agreements with both OpenAI and Meta.

Key points

  • Accelerating artificial intelligence workloads are revitalizing enterprise cloud spending…: Accelerating artificial intelligence workloads are revitalizing enterprise cloud spending across all major industry competitors.
  • Amazon is actively expanding its hardware ecosystem with additional Nvidia GPUs and exter…: Amazon is actively expanding its hardware ecosystem with additional Nvidia GPUs and external Trainium chip distribution.
  • Leadership projects the cloud unit could surpass 40% growth in coming years and ultimatel…: Leadership projects the cloud unit could surpass 40% growth in coming years and ultimately reach a trillion dollars.

Sources checked by our analysis pipeline: 1

Amazon's cloud-computing unit reported more rapid third-quarter growth than analysts had projected.

Revenue came in at $45.98 billion, up 39% year over year and above the $45.29 billion consensus among analysts polled by StreetAccount, according to a statement. Growth in the second quarter came in at about 37%.

"Our core compute and storage revenue grew at their fastest rates in several years," Amazon CEO Andy Jassy said on a conference call with analysts. The AWS growth rate was the highest since the fourth quarter of 2021.

Amazon remains the top cloud by revenue, but growth has also sped up at rivals Alphabet and Microsoft. On Wednesday Alphabet said the Google Cloud business, which contains infrastructure and Google Workspace subscriptions, more than doubled in the third quarter.

All the major clouds have been racing to build data centers that can accommodate high artificial intelligence demand. During the quarter, AWS announced plans to expand its portfolio of Nvidia graphics processing units that can handle AI workloads.

AWS also acquired data analysis startup DuckLabs and signed deals with Meta and OpenAI, according to…

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