Amazon Stock Jumps 12% as AWS AI Surge Revives Tech Giant’s Momentum
Amazon Stock: Amazon.com, Inc. (NASDAQ: AMZN) saw its shares surge nearly 12% in pre-market trading on Friday, after the company delivered a strong update on its cloud business Amazon Web Services (AWS) fuelling renewed investor optimism.
What’s driving the surge
- AWS posted revenue of $33 billion in the third quarter, a 20% year-over-year increase, signalling a revival in cloud growth.
- Meanwhile, Amazon’s retail revenues rose 11% and its advertising business jumped 24% to $17.7 billion.
- Analysts interpret the results as a pivotal moment for Amazon, which had lagged behind rivals in the AI and cloud arms race.
What it means for investors
The strong performance from AWS especially in the context of heightened competition from Microsoft Corporation and Alphabet Inc. has eased concerns that Amazon was losing its footing in key growth markets. One portfolio manager told Reuters capturing this milestone was crucial.
At the same time, Amazon has struggled earlier in 2025, underperforming the broader tech-heavy indexes and facing headwinds from weaker consumer spending and macroeconomic pressure.
Risks still present
- Despite the AWS boost, Amazon remains subject to broader economic risks including inflation, weak consumer sentiment and regulatory scrutiny.
- Some analysts point out that while cloud growth is impressive, margin pressures in the retail business and global logistics remain concerns.
- Amazon’s forward P/E remains elevated compared to many peers, suggesting expectations are high.
Analyst commentary
There was definitely concern about AWS losing market share to Microsoft Azure and Google Cloud. But now AWS is aboard the train as well. Portfolio manager Jed Ellerbroek.
Bottom line
For now, Amazon appears to have turned a corner its cloud business is demonstrating renewed strength and its advertising growth provides a promising margin-tailwind. However, the true test will be whether Amazon can sustain this momentum across retail, cloud and advertising while navigating macro-headwinds. For investors, the surge signals a potentially important inflection point but one that still comes with caution.
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