Amazon's Cloud Surge: A Game-Changer in the AI Race

Amazon shares soared nearly 12% in premarket trading due to strong growth at Amazon Web Services (AWS) and a bullish sales outlook. AWS's 20% revenue rise played a significant role, quelling fears over competition in the AI domain. Retail and advertising divisions also delivered robust performances.

Amazon's stock rose sharply, climbing nearly 12% in premarket trading on Friday, attributed to impressive growth in its cloud division, Amazon Web Services (AWS), as well as an optimistic sales outlook. These developments have assuaged concerns that the tech behemoth was lagging behind in the competitive AI sector.

With AWS's revenue climbing 20% in the third quarter, in comparison to Microsoft Azure's 40% and Google Cloud's 34%, the Seattle-based company demonstrated a strong rebound. Analysts view this as a pivotal moment for Amazon, whose cloud revenue of $33 billion significantly outpaces Google Cloud's $15.16 billion, evidencing AWS's contribution amid economic challenges facing e-commerce.

Amazon, led by CEO Andy Jassy, also recorded robust performances in its retail and advertising segments, marking a 11% and 24% rise respectively. This diversification beyond e-commerce has been essential in driving growth and enhancing revenue streams, positioning Amazon competitive despite the slower AI deal acquisition this year.

(With inputs from agencies.)