Amazon Sees Biggest Cloud Growth Since 2022 Following Major Outage

For the first time since its cloud computing unit experienced a significant failure that impacted various services from smart beds to banks, Amazon has made its financial data public.

Despite this global outage, Amazon Web Services (AWS) continues to thrive, reporting a 20% year-over-year revenue growth for the quarter. Analysts on Wall Street predict that AWS will generate a net revenue of $32.42 billion in the third quarter, while Amazon’s actual reported revenue stands at $33 billion.

“AWS is growing at a rate not seen since 2022,” CEO Andy Jassy mentioned in a statement during the earnings call.

Following the third-quarter earnings report that exceeded analysts’ forecasts, the company’s stock surged by approximately 9% in after-hours trading.

The earnings announcement underscored Amazon’s ambition to compete more effectively with corporations that have successfully capitalized on the AI boom. Amazon’s stock performance has trailed behind some major tech competitors, and its e-commerce operations are particularly vulnerable to the far-reaching and unpredictable tariff policies of the Trump administration compared to companies driven by software.

Value at roughly $2.4 trillion, Amazon reported that it significantly outperformed Wall Street’s expectations, largely due to the expansion of its cloud computing services. Analysts had anticipated earnings of $1.58 per share with net sales of $177.82 billion, whereas Amazon announced sales of $180.17 billion and earnings per share of $1.95.

AWS is facing mounting rivalry from alternative providers like Google Cloud and Microsoft Azure, the latter of which has established a partnership with OpenAI and reported robust growth in its cloud segment, boosting its stock prices.

Nevertheless, AWS remains a crucial component of the modern Internet, and the extent of its influence was inadvertently highlighted earlier this month when a glitch in its cloud services rendered websites, apps, cutting-edge products, and critical communication systems, including electronic health records, inoperable. The outage affected millions and lasted several hours, revealing how integral Amazon’s services are to everyday life.

During the earnings call, Amazon executives promoted the integration of AI tools like shopping assistant Rufus into its services. They also discussed Zoox’s plans to expand its robotaxi business, with self-driving service trials scheduled to commence in Washington, D.C., later this year.

Earlier this week, Amazon announced plans to cut 14,000 jobs at its headquarters, with more layoffs anticipated across the organization. This decision was publicly communicated through a blog post titled “Staying Agile and Continuing to Strengthen Our Organization,” which cited advancements in AI as a key reason, stating that the company aims to “function like the world’s largest startup.”

“We must remember that the world is rapidly evolving,” the Amazon post noted. “This generation of AI represents the most transformative technology since the Internet, allowing businesses to innovate unprecedentedly faster.”

Jassy indicated in a blog post earlier this year that the company’s investments in AI would lead to a “reduction in personnel for some roles currently held.”

However, during a conference call with investors, Jassy clarified that the significant layoffs were not driven by AI, asserting that they stemmed from “culture” and that the company is focusing on a more flexible, startup-like approach.

“The announcement we made a few days ago wasn’t purely financial and hasn’t been so far—it’s not primarily AI-driven either. It’s fundamentally about our culture,” Jassy stated.