Amazon Delivers Strong Q3 Earnings Beat

Amazon (AMZN) shares soared 13% after posting a robust Q3 earnings beat, signaling accelerating growth across multiple business lines.

EPS: $1.95 vs. $1.58 consensus (+37¢ beat)
Revenue: $180.2B (+13% Y/Y)

Growth was broad-based across online stores, physical stores, third-party seller services, subscription revenue, and advertising, underscoring Amazon’s continued diversification strength.

AWS and Advertising Drive Outperformance

Amazon Web Services (AWS) revenue jumped 20% Y/Y to $33.01B, outpacing expectations and reflecting strong AI and enterprise cloud demand.
Advertising services surged to $17.7B, exceeding analyst estimates and highlighting Amazon’s growing monetization of its e-commerce ecosystem.

Despite an operating income shortfall, Amazon’s core segments showed solid profitability and scalability as cloud and ad businesses continue to expand faster than retail.

Operating Margin and Spending Outlook

Operating Income: $17.42B
Operating Margin: 9.7% (slightly below estimates due to heavier infrastructure and AI investment)

Management acknowledged elevated spending tied to AI capacity expansion, emphasizing the company’s focus on long-term cloud and data center leadership.

“AWS power capacity has doubled since 2022 and is set to double again by 2027,” the company said.

CapEx and AI Investment Expansion

Amazon expects full-year cash CapEx of roughly $125B in 2025, with plans to increase that further in 2026. The spending reflects aggressive investment in AI infrastructure, cloud capacity, and data centers, positioning Amazon to compete at scale with hyperscalers like Microsoft and Google.

Key Takeaways

EPS: $1.95 vs. $1.58 est.
Revenue: $180.2B (+13% Y/Y)
AWS revenue: $33.01B (+20% Y/Y)
Ad revenue: $17.7B (beat expectations)
CapEx: ~$125B in 2025, rising in 2026
Shares: +13% after results