Amazon’s stock rises on the strength of AI, propelling the AWS cloud unit to phenomenal growth

Early Friday trading saw Amazon shares leap more than 11% as concerns that the internet giant was lagging behind its competitors in the AI race were allayed by the company’s cloud division’s robust growth and positive sales outlook.

The company’s recent AI initiatives, Amazon Web Services (AWS), saw a 20% increase in revenue in the third quarter. The sheer size of AWS amplifies its effect on growth, even if Google Cloud’s and Microsoft Azure’s revenue increased 34% and 40%, respectively.

Its cloud services revenue of $33 billion more than doubles Google’s $15.16 billion.

Wall Street celebrated AWS’s recovery, with analysts noting that the earnings marked a possible turning point for Amazon.

“There was certainly concern about AWS potentially losing market share to Microsoft Azure and Google Cloud… But now AWS has also joined the trend and is experiencing a big increase in revenue,” said Jed Ellerbroek, portfolio manager at Argent Capital.

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