Amazon's AWS Revenue Grows 20.2% to $33B, Stock Near All-Time High
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Cloud Computing Growth: Amazon's AWS reported a 20.2% year-over-year revenue increase to $33 billion in Q3, driven by surging enterprise spending on AI infrastructure, resulting in a $200 billion backlog that provides exceptional multi-year revenue visibility and solidifies Amazon's leadership in the cloud market.
- Data Center Expansion: The company plans to double its data center capacity by 2027, which will not only reduce operational costs but also attract larger workloads, enhancing its price-performance advantage in the competitive cloud computing landscape.
- Advertising Business Growth: Advertising revenue surged 22% year-over-year to $17.7 billion in Q3, becoming Amazon's second-largest growth engine, with a robust full-funnel advertising portfolio improving customer conversion rates; analysts project advertising will generate $68 billion in revenue by 2025, accounting for 35% of total operating income.
- Long-Term Investment Outlook: Although Amazon's stock is nearing an all-time high, analysts suggest the company is entering a new phase of accelerated growth, with capital investments expected to reach $125 billion in 2025, indicating that long-term investors should overlook short-term price pullbacks and remain optimistic about future growth potential.
AMZN
$232.14+Infinity%1D
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.71 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
43 Analyst Rating
40 Buy
3 Hold
0 Sell
Strong Buy
Current: 228.430
Low
250.00
Averages
294.71
High
340.00
Current: 228.430
Low
250.00
Averages
294.71
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
