Amazon Stock Soars After Q3 Earnings Beat: AWS Leads the Rally

Amazon (NASDAQ: AMZN) shares surged more than 13% in after-hours trading on Thursday after the company reported stronger-than-expected third-quarter earnings, fueled by rapid growth in its cloud computing arm, Amazon Web Services (AWS). The upbeat results reinforced investor confidence in the tech giant’s strategy as it heads into the final quarter of 2025, with AWS once again proving to be the company’s profit engine.

The earnings report showed Amazon’s continued resilience in a challenging economic environment, with solid performance across e-commerce, advertising, and cloud segments. The company’s ongoing investments in artificial intelligence (AI) and data infrastructure also stood out as major growth drivers. As Wall Street digests the numbers, analysts say Amazon’s latest results could mark a turning point in its post-pandemic recovery — and potentially set the stage for further gains into 2026.

Amazon Delivers a Strong Q3 Beat Across Key Segments

Amazon’s third-quarter report came in well above Wall Street expectations, underscoring strong execution across its core business lines. The company posted revenue of $178.4 billion, up 13% year-over-year, beating analysts’ consensus estimate of around $176 billion. Earnings per share (EPS) came in at $1.42, handily surpassing the expected $1.23, as cost controls and operational efficiency lifted margins.

A major highlight was Amazon Web Services (AWS), which reported $27.1 billion in revenue, up nearly 20% year-over-year, showing a clear rebound in enterprise cloud spending. AWS contributed a substantial share of Amazon’s total operating income, reaffirming its position as the company’s growth engine. Meanwhile, the advertising business also continued its rapid ascent, generating $15.6 billion in quarterly revenue, up 22% from a year earlier, thanks to strong demand for sponsored product placements and streaming ads on Prime Video.

Management emphasized that the company’s focus on improving logistics efficiency and optimizing fulfillment networks has started to pay off. North America retail margins improved notably, while international operations narrowed their losses. Overall, Amazon’s Q3 results painted a picture of a company firing on all cylinders — balancing near-term profitability with long-term strategic investments.

The Cloud Strikes Back: AWS Sends Amazon Stock Soaring

Amazon.com, Inc. (AMZN) Price

Source: Yahoo Finance

Amazon’s stock rally after the earnings release was powered by a stellar rebound in Amazon Web Services (AWS), the company’s cloud computing powerhouse. AWS posted $27.1 billion in revenue for the third quarter, up nearly 20% year-over-year, marking its fastest growth rate since early 2023. The segment also delivered strong operating income, reinforcing its role as Amazon’s primary profit driver.

The resurgence in AWS growth signaled a broader recovery in enterprise cloud spending, particularly among clients investing heavily in AI-driven workloads and data infrastructure. CEO Andy Jassy said the company’s long-term commitment to AI integration across its cloud offerings is starting to bear fruit, with major corporations increasingly adopting Amazon’s generative AI services.

The results reignited investor enthusiasm. AMZN shares jumped more than 13% in after-hours trading, adding roughly $150 billion in market capitalization — one of the largest single-session value gains in the company’s history. Analysts were quick to label the report a turning point for Amazon’s cloud strategy, saying AWS’s momentum could set the tone for even stronger performance in 2025.

The Bulls Are Back: Analysts Boost Amazon Targets After Strong Q3

Investor sentiment toward Amazon turned decisively bullish following its stronger-than-expected third-quarter earnings. Amazon shares surged more than 13% in after-hours trading, reaching their highest level in over two years and adding roughly $150 billion to the company’s market value. The rally underscored renewed investor confidence in Amazon’s ability to sustain growth across cloud, retail, and advertising segments.

Wall Street analysts were quick to respond. JPMorgan reaffirmed its Overweight rating and raised its price target to $245, citing robust AWS performance and steady improvements in operating margins. Morgan Stanley echoed the optimism, describing Amazon’s results as “a clear signal of durable margin expansion.” Meanwhile, Wedbush Securities highlighted AI and cost-efficiency gains as key drivers of long-term profitability, maintaining its Outperform rating.

The upbeat commentary helped cement a shift in market sentiment. Trading activity spiked as both institutional and retail investors increased exposure to the stock, with analysts broadly agreeing that Amazon has entered a new growth phase. The company’s strong execution and accelerating AI initiatives have positioned it as one of the top-performing tech stocks to watch heading into 2026.

Amazon’s Strategic Outlook: Betting Big on AI and Infrastructure

Looking ahead, Amazon is doubling down on long-term investments designed to strengthen its leadership across cloud computing, artificial intelligence, and digital retail. The company revealed plans to spend roughly $125 billion in capital expenditures in 2025, much of which will be directed toward expanding AWS data centers and AI infrastructure. Management emphasized that these investments are essential to meeting surging enterprise demand for cloud services and generative AI tools.

CEO Andy Jassy noted that Amazon’s AI initiatives are now integrated into every layer of its ecosystem — from AWS model training and Bedrock services to customer-facing innovations in Alexa and Prime Video. These efforts, he said, are designed to position Amazon at the center of the next wave of AI-driven growth. Meanwhile, the company continues to improve its logistics and fulfillment network, focusing on faster delivery times and cost optimization across North America and international markets.

Analysts see these moves as a calculated effort to balance near-term profitability with future expansion. While the heavy spending has raised some concerns about margins, most agree it reinforces Amazon’s long-term moat in cloud and AI services. As one analyst put it, “Amazon is playing the long game — and it’s positioning itself to win big in the AI era.”

Amazon Stock Price Prediction: What’s Next for AMZN?

After its strong third-quarter performance, analysts are increasingly optimistic about Amazon’s stock trajectory over the coming months. The company’s mix of consistent revenue growth, AI-driven expansion, and improving margins has set the stage for continued momentum into 2025.

In the short term (3–6 months), analysts expect Amazon’s share price to trade between $220 and $250, supported by strong fundamentals and a favorable macro backdrop for tech stocks. Many anticipate that AWS and advertising revenue will continue to outperform expectations, helping the stock maintain its upward trend through early 2026.

For the medium term (12 months), consensus estimates suggest a potential upside toward $270–$300 per share, assuming sustained double-digit growth in AWS and continued operating efficiency. Firms such as JPMorgan, Goldman Sachs, and Morgan Stanley all maintain Buy or Overweight ratings, citing Amazon’s dominant position in AI infrastructure and e-commerce logistics as long-term catalysts.

However, some analysts caution that elevated capital expenditures and global economic uncertainty could introduce short-term volatility. Still, the broader market view remains bullish — Amazon’s renewed growth story, powered by cloud and AI, is widely seen as a foundation for steady value creation well into the next fiscal year.

Conclusion

Amazon’s latest earnings report has reignited investor optimism, proving that the company’s core engines — AWS, advertising, and e-commerce — remain stronger than ever. The stellar Q3 performance, led by a powerful rebound in cloud growth, has restored Wall Street’s confidence in Amazon’s long-term vision. With shares soaring more than 13% after the announcement, the company reaffirmed its position as a dominant force in both the tech and retail sectors.

Looking ahead, Amazon’s strategy of heavy investment in AI infrastructure and data centers signals its determination to lead the next wave of digital transformation. While near-term spending may weigh on margins, the company’s long-term prospects remain compelling. For investors, Amazon’s renewed growth trajectory — fueled by cloud innovation and operational efficiency — makes it one of the most closely watched stocks as 2025 draws to a close.