TLDR
- Amazon (AMZN) stock opened at $259.30 on Monday, after a 0.35% dip in Friday’s session
- AWS revenue rose more than 39% to $46 billion, its fastest pace in nearly five years
- AWS operating income jumped 55% to over $17 billion
- Contracted AWS backlog reached $578 billion, up triple digits year over year
- Q3 EPS of $1.89 and revenue of $201.94 billion both missed estimates
Amazon (AMZN) stock opened at $259.30 on Monday. That is just below Friday’s close, when the stock slipped 0.35%.
The price sits inside a 52-week range of $196.00 to $287.20. The company’s market cap is about $2.80 trillion.
Behind the quiet tape is a loud cloud story. Amazon Web Services posted its fastest growth in nearly five years in the third quarter.
AWS revenue climbed more than 39% year over year to $46 billion. That puts its annual run rate at $184 billion.
The Cloud Numbers Behind the Move
Profit grew even faster than sales. AWS operating income rose 55% to more than $17 billion.
The unit makes up about 60% of Amazon’s total operating income. In other words, the cloud still carries the bottom line.
The order book looks full, too. AWS reports a contracted revenue backlog of $578 billion, a triple-digit gain from last year.
Usage of Amazon Bedrock, its AI inference service, is also climbing fast. Fortune 500 customers are spending about seven times more than a year earlier.
CEO Andy Jassy said AWS could become a trillion-dollar business within five to 10 years. Management expects the growth to last through at least 2028.
The group results told a softer story. Amazon earned $1.89 per share, missing the $1.97 estimate.
Revenue came in at $201.94 billion against estimates of $202.22 billion. That was still up 12.1% from a year earlier.
Advertising grew 12% in the quarter. Management expects growth in the high teens next.
Spending, Rules and Wall Street
The bill for all this demand is large. Amazon raised its 2026 capital spending forecast to $220 billion from $200 billion.
Jassy said even that may not fully meet demand. The spending is weighing on free cash flow for now.
Amazon says that pressure will last until its new data centers start paying off. The stock fell in the session after earnings as investors focused on the spending plans.
Policy could add another cost. After the midterm elections, rules that make tech firms pay more of their data-center power and grid costs are getting more attention.
Analysts remain upbeat. MarketBeat shows a “Moderate Buy” consensus with an average price target of $321.74.
Of the analysts tracked, two rate the stock Strong Buy, 55 rate it Buy and three say Hold. Phillip Securities upgraded Amazon to “strong-buy” on November 2.
Insiders have been sellers. Over the last quarter, they sold 71,589 shares worth $18.5 million.
That includes a sale by Douglas Herrington of 1,000 shares at $243.47 on November 2, under a pre-arranged plan. Insiders own 8.9% of the company.
Institutions own 72.2% of the stock. Madrona Financial Services raised its stake by 62.4% in the third quarter to 18,149 shares.
Amazon is also testing text-based shopping through Alexa for select U.S. customers. The assistant can find products, build carts and complete purchases.
