NEW YORK, October 31, 2025 – Amazon.com Inc (AMZN.O) shares jumped more than 11% in early trading on Friday, powered by strong growth at Amazon Web Services (AWS) and a bullish sales outlook that eased investor concerns about the company lagging behind competitors in the AI race.

Revenue at AWS, the centerpiece of Amazon’s AI and cloud strategy, rose 20% in the third quarter, driven by surging demand for AI-powered infrastructure and core cloud services. While Microsoft Azure grew 40% and Google Cloud 34%, AWS’s massive scale amplifies the significance of its growth.

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AWS Growth and Market Leadership

AWS generated $33 billion in cloud revenue, more than double Google Cloud’s $15.16 billion, underscoring its continued dominance in the cloud market.

Jed Ellerbroek, portfolio manager at Argent Capital, commented:

“There were concerns that AWS was losing market share to Azure and Google Cloud. But AWS is back on track, seeing significant revenue growth this quarter, earlier than many investors anticipated.”

Amazon CEO Andy Jassy said AWS is “growing at a pace we haven’t seen since 2022,” fueled by demand for AI infrastructure and digital services. In response, Amazon plans to increase capital expenditures for the coming year, joining other Big Tech companies in boosting investment for AI capabilities.

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Year-to-Date Performance and Market Impact

Before Friday’s rally, Amazon shares had risen only 1.6% in 2025, trailing other “Magnificent Seven” tech stocks due to market share concerns and a lack of strong AI updates. Friday’s gains helped Amazon surpass Tesla (TSLA.O) and Apple (AAPL.O) in year-to-date performance, with the EV company up roughly 11% and Apple about 8%.

Analyst Farhan Badami of eToro said:

“Amazon delivered one of the strongest performances of this earnings season, quieting doubts about its ability to execute at scale.”

Amazon’s forward 12-month price-to-earnings ratio stands at 29.63, higher than Alphabet’s 25.98 but slightly below Microsoft’s 31.72, reflecting strong market confidence in AWS and overall growth prospects.

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Retail and Advertising Businesses Also Strong

Beyond cloud, Amazon’s retail and advertising segments posted robust results:

• Retail grew 11% year-over-year, outperforming virtually all large U.S. retailers.
• Advertising revenue jumped 24% to $17.7 billion, driven by expanded ad placements across Echo devices, grocery carts, and sponsored listings.

Ellerbroek noted:

“Amazon’s retail growth is unmatched among major American retailers, while advertising is expanding quickly as a profitable complementary business.”

At least 23 brokerages raised their price targets for Amazon following the earnings report, highlighting strong investor sentiment across multiple business segments.

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Key Takeaways

• Amazon shares surged over 11% following strong AWS growth and a bullish sales forecast.
• AWS revenue rose 20%, reaffirming Amazon’s leadership in the cloud market despite competition from Azure and Google Cloud.
• Year-to-date, Amazon overtakes Tesla and Apple among major tech stocks.
• Retail and advertising segments delivered strong performances, with 11% and 24% growth, respectively.
• Amazon’s forward P/E ratio of 29.63 reflects confidence in both cloud and AI-driven growth.