Amazon shares pop on earnings beat, cloud growth

Amazon reported better-than-expected earnings and revenue for the third quarter, driven by growth in its cloud computing and advertising businesses. The stock ticked about 5% higher in extended trading.

Here are the results.

Wall Street is also watching several other numbers in the report:

In cloud, Amazon Web Services revenue was a hair below consensus estimates, but it's growing faster than the same period last year. Sales grew 19% during the quarter compared to a year ago when sales accelerated by 12%. The company was navigating slowing growth in its cloud business last year as customers trimmed their budgets due to heightened economic concerns.

AWS is still growing slower than its top challengers. Revenue from Azure and other cloud services at Microsoft came in at 33%, and Alphabet's Google Cloud revenue increased nearly 35%.

Amazon's capital expenditures surged 81% year-over-year from $12.48 billion to $22.62 billion as it continues to invest in data centers and equipment like Nvidia GPUs to power its artificial intelligence products. Amazon has launched several AI products in its cloud and e-commerce businesses, and it's also expected to announce a new version of its Alexa voice assistant powered by generative AI. The company's chief financial officer Brian Olsavsky said on an earnings call that the majority of the company's 2024 capex spending is to support the growing need for technology infrastructure.

Amazon CEO Andy Jassy said the company plans to spend about $75 billion on capex in 2024 and that he suspects the company will spend more in 2025. "The increase bumps here are really driven by generative AI," Jassy said during a call with analysts.

"It is a really unusually large, maybe once-in-a-lifetime type of