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Amazon’s Stock Skyrockets: Q3 Beat, Cloud and AI Boom Fuel Rally
30 October 2025
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10 mins read

Amazon’s Stock Skyrockets: Q3 Beat, Cloud and AI Boom Fuel Rally

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  • Stock Surge: On Oct. 30, Amazon (AMZN) was trading around $226–$227 (intraday dip ~1%) before exploding ~10–11% higher in after-hours trading after its Q3 report [1] [2]. This jump capped a volatile week in which AMZN had lagged peers – up just ~4% year-to-date vs. Nasdaq’s ~15% gain [3] and far behind Microsoft, Google and other tech giants [4].
  • Q3 Earnings & Financials: For the July–Sept quarter, Amazon reported $180.2 billion in revenue (up 13% YoY, above the $177.8B consensus) and EPS $1.95 (vs. $1.58 est.) [5]. AWS revenue hit $33 billion (+20% YoY) [6], re-accelerating cloud growth. Operating income was $17.4B (flat YoY), but included one-time charges of ~$1.8B in severance and $2.5B for the FTC settlement (see below) [7].
  • Cloud & AI Drivers: AWS remains the growth engine – Q3 consensus saw 18–20% cloud sales growth [8]. In Q2 AWS grew ~17% to $30.9B [9], and CEO Andy Jassy noted AWS is “growing at a pace we haven’t seen since 2022” [10]. Amazon is plowing into AI: it unveiled Alexa+ (an advanced AI assistant) on four new Echo devices, took a $4 billion stake in Anthropic, and struck an AI cloud partnership with the NBA (“Inside the Game” analytics platform) [11] [12]. Amazon’s ads business is also booming (Q2 ads +22–23% YoY) and Amazon will power Microsoft’s advertising DSP using Amazon shopper data [13].
  • Retail & Logistics: Amazon’s core retail sales are stable. It kicked off the holiday season with a “Prime Big Deal Days” sale on Oct. 7–8 – early reports say customer turnout was strong and will modestly boost Q4 sales [14]. Last quarter online store sales grew ~11% YoY [15]. Amazon is hiring 250,000 seasonal workers (as in 2024) to handle peak delivery demand [16], while cutting corporate costs (see below).
  • Regulatory & Layoffs: In late Sept. Amazon agreed to a $2.5 billion FTC settlement over Prime subscription sign-up claims (with $1.5B refunds) [17]. The company admitted no wrongdoing; Wall Street took it as a positive (“major overhang removed”) [18]. Separately, Amazon announced plans to cut ~14,000 corporate jobs (mainly to streamline with AI) [19], and leaked documents hint at automating up to 600,000 roles by 2027 in a $12.6B efficiency drive [20].
  • Analyst Views: Nearly all analysts rate AMZN a Buy, with a 12-month target around $268 (roughly 18% above current) [21] [22]. JPMorgan and Bank of America are “overweight/upbeat,” citing strong retail and ad trends [23]. Benchmark’s Daniel Kurnos expects ~20% AWS growth and thinks a cloud beat could “give AMZN stock a boost” [24]. Motley Fool’s Jennifer Saibil notes Amazon trades ~29× forward earnings, which she deems reasonable for a company with double-digit growth in AWS and ads [25].

Stock Performance

On Oct. 30, Amazon shares hovered in the $223–228 range during the day [26]. They opened lower and were down about 1% intraday, tracking broader tech weakness (the Nasdaq fell ~1.6% that day). Yet when Amazon smashed expectations after the close, the stock surged over 10% in extended trading [27]. Overall, AMZN’s 2025 performance has been lackluster – up only ~4% YTD [28] versus double-digit gains for Microsoft, Google and Apple. In fact, CNBC’s Jim Cramer bluntly called Amazon the worst performer of the “Magnificent Seven” tech stocks this year [29]. For perspective, over the past five years Amazon is up ~44% vs. 1,521% for Nvidia [30]. (A chart comparing YTD returns of AMZN, MSFT, GOOGL, META, etc. would show Amazon clearly lagging its peers.)

Markets responded positively to the Q3 results. After-hours gains on Oct. 30 pushed Amazon’s stock up roughly 10–11%, reclaiming the $240 area (intraday 52-week high was ~$242 in Feb. 2025 [31]). Analysts noted this jump was driven by strong cloud growth and better-than-feared margins. One commentator quipped that although AWS’s Oct. 20 outage had been in the spotlight, the outage “didn’t quite shine” – the swift recovery and resilient sales helped soothe investor nerves [32] [33]. In short, after months of relative underperformance, Amazon is breaking out: traders say a sustained move above the ~$242 February high could propel shares toward $270 or more [34].

Q3 Earnings and Financials

Amazon’s Q3 report (after-market Oct. 30) delivered a clear beat. Revenue was $180.2 billion, up 13% year-over-year and above the $177.8B consensus [35]. Operating income came in at $17.4B, essentially flat YoY [36]. The company cited strong sales across its segments and pointed to prudent cost management. Earnings per share of $1.95 topped the expected $1.58 [37].

Key drivers included:

  • AWS (Cloud): Sales of $33 billion (+20% YoY) [38]. This was slightly above forecasts ($32.5B est.), and marked the fastest cloud growth since 2022. CEO Andy Jassy highlighted that AWS growth has “re-accelerated to ~20%” as customers ramp up AI initiatives [39]. AWS’s high margin ($11.4B op income in Q3) underpinned much of Amazon’s profit.
  • Online Stores: Revenue of $67.4B, up 10% YoY [40]. This includes a solid performance from the Prime Day (July 8–11) and holiday prep spending.
  • Third-Party Seller Services: $42.5B, up 12% [41].
  • Advertising and Other: Ad sales (on Amazon’s platform and devices) rose ~19–22% in Q3 [42] [43]. Advertisers are doubling down on Amazon’s e-commerce reach and new AI-driven ad tools.
  • Charges: The quarter included a $1.8B severance charge for recent layoffs and the announced job cuts [44]. It also included the $2.5B FTC settlement (with $1.5B in consumer refunds) [45]. Stripping out these one-timers, profit would have been higher. Amazon had forecast an operating income range of $15.5–20.5B; at $17.4B it comfortably met guidance midpoint.

Overall, the beat relieved investor concerns about Amazon’s margins and AI spending. While Wall Street remains watchful of rising costs (AWS capex planned near $100B in 2025), it seemed reassured that Amazon can still expand cloud and ad revenues briskly. As one analyst summarized, “AWS is the crown jewel” and strong cloud growth is “a major positive” for the stock [46] [47].

AWS and Business Units (Cloud, AI, Ads)

Amazon Web Services is the centerpiece of both today’s results and tomorrow’s growth story. In Q2 (recent quarter), AWS revenue grew 17.5% to $30.9B [48], and Q3 growth accelerated toward 20%. AWS’s re-acceleration is notable – Microsoft and Google have grabbed some AI mindshare, but Amazon is pouring resources into cloud capacity and AI tools. In Sept. Amazon announced Alexa+, a new generative-AI assistant, and upgraded Echo, Ring and Blink devices with AI features [49]. It also took a $4B stake in Anthropic to fuel its AI cloud services [50]. These moves indicate Amazon is betting big that its AI infrastructure and data services (on AWS) will attract enterprise spending.

Beyond tech toys, AWS is clinching real business deals. For example, on Oct. 1 Amazon and the NBA announced “NBA Inside the Game”, a multi-year platform of AI-powered stats and insights for fans and teams [51]. Reuters reports this partnership will use AWS to generate real-time analytics and video-enhancements. (By comparison, Microsoft in September struck a similar Premier League AI deal [52], illustrating how cloud vendors are racing for sports data.) On the ad front, Amazon teamed up with Microsoft so that Amazon’s ad tech is the “preferred DSP” for Microsoft’s clients [53] – a move that could significantly broaden Amazon’s advertising revenue.

The AWS outage on Oct. 20 was a scare but ultimately boosted confidence in AWS reliability. A DNS glitch in AWS’s Virginia data center briefly knocked out thousands of websites (Snapchat, banks, games, etc.) [54]. By evening AWS engineers had restored service and backlogs cleared. Notably, Amazon’s stock actually ticked up ~1.6% that day – evidence that investors viewed the glitch as a temporary hiccup [55]. In effect, the outage underscored AWS’s centrality in the internet’s infrastructure, but the quick recovery convinced markets AWS can handle such failures.

Meanwhile, Amazon’s advertising arm continues to outperform. In Q2 (July–Sept), ads were ~10–15% of sales and growing ~22% year-over-year [56]. Higher election-season ad spend and more brands flocking to Amazon’s platform have fueled this rise. For context, Bank of America analysts note healthy retail and online ad trends suggest room for Amazon to keep beating revenue targets [57]. In short, both AWS and ads are high-margin engines helping offset any retail slowdowns.

Retail Sales and Logistics

Amazon’s e-commerce business still grows steadily. Q2 online store sales rose about 11% YoY [58] (with international/third-party sales up similarly). The company is streamlining costs and deliveries to improve margins. For peak season, Amazon is hiring about 250,000 U.S. seasonal workers (matching last year) to bolster warehouses and delivery networks [59]. This supports its ambition of record fast deliveries – Amazon noted it is on track for all-time high same-day/next-day delivery volumes [60].

On Oct. 7–8, Amazon held a second annual Prime Big Deal Days (a Halloween sale event). Early indicators suggest it attracted strong demand. Analysts expect these sales to moderately lift Q4 revenue, much like the July Prime Day did [61]. In parallel, Amazon continues cost-cutting: it announced plans to trim about 14,000 corporate jobs (in categories like HR, Alexa, Prime Video, etc.) [62] to redeploy resources toward technology and AI. This is part of a broader “efficiency through AI” strategy – CEO Jassy has signaled that new AI tools will allow Amazon to operate leaner. Investors largely applauded this plan, viewing it as necessary discipline after pandemic-era over-hiring [63] [64].

One potential retail headwind is global tariffs and competition from discount rivals (Shein, Temu). Amazon has cited tariffs as a factor in some earnings reports. However, so far it has mostly offset these via higher productivity and Prime membership perks. Notably, Amazon remains the largest online retailer by far, and its expanding Prime ecosystem (like faster shipping and entertainment bundles) continues to attract subscribers.

Regulatory and Legal Updates

Aside from business operations, investors have been watching Amazon’s regulatory landscape. The FTC settlement announced in late September removed a looming overhang: Amazon will pay $2.5 billion (with $1.5B going to customers) to resolve allegations about its Prime subscription practices [65]. Importantly, Amazon admitted no wrongdoing, and analysts have deemed the amount manageable for its size. The stock reaction was muted (shares barely budged on the news) [66], suggesting investors viewed it as a clean-up item.

However, Amazon is still facing a separate FTC antitrust lawsuit filed in 2023, aimed at curbing alleged dominance in online retail. That case remains in early stages and investors will watch its progress closely. Additionally, Amazon has been the subject of intensive scrutiny in Europe over data/privacy rules for ads, and in the U.S. regarding its labor practices. So far, no new major penalties have emerged.

On Oct. 28, Reuters reported Amazon would cut about 14,000 corporate jobs (a move already in line with leaked plans) [67]. This announcement, part of CEO Jassy’s AI-driven restructuring, had been widely rumored. Shares actually ticked up ~0.8% on the day of the announcement [68] (Oct 28), reflecting relief that Amazon is proactively controlling costs. In sum, the week’s major non-earnings news (FTC deal, layoffs) largely cleared uncertainty around Amazon’s bottom line and freed up focus on future growth.

Expert Commentary and Analysis

The consensus on Wall Street is optimistic on Amazon’s prospects, despite its rocky 2025 so far. Several analysts highlighted the company’s strategic pivots:

  • JPMorgan’s research team maintains an “Overweight” rating with a $265 price target, though they caution that Amazon needs to keep up with AI investments to justify the valuation [69].
  • Bank of America rates Amazon as “Buy”, citing strong retail fundamentals and continued ad growth; they actually raised their estimates on the Q3 results, noting upside to operating income given better margin execution [70].
  • Benchmark’s Daniel Kurnos (as noted above) is bullish on AWS; he predicted ~20% cloud revenue growth in Q3 and said a beat there could “give AMZN stock a boost” [71].
  • The Motley Fool’s Jennifer Saibil argues that Amazon’s multiple (~29–34× forward earnings) is justified by its high-growth segments [72] [73]. In sum, almost all of the ~45 analysts covering AMZN rate it a Buy, with an average 12-month target around $268 [74] [75].

Investor sentiment this week mirrored these views. After the earnings beat and upbeat AWS commentary, retail investors showed renewed enthusiasm. On the conference call, Jassy emphasized that “we continue to see strong demand in AI and core infrastructure” [76], reinforcing confidence that Amazon’s long-term bets are paying off. Some traders likened the stock’s pullback earlier in October to a buying opportunity – indeed, sources note that many funds “bought the dip” going into earnings, expecting Amazon to outgrow market fears. (One TS2 analyst summary noted that after an October decline, Amazon “appears to have rebounded” and is viewed as a “buying opportunity” if AWS growth and margins hold [77].)

On social media and forums, retail investors also pointed out Amazon’s shiny new AI devices and cloud deals as evidence the company is “never done trying to make you money,” as CNBC’s Jim Cramer quipped this week. (Cramer’s repeated charting of Amazon’s underperformance has raised eyebrows, but the recent surge suggests some “Cramer bulls” were proved right about a turnaround.) Of course, voices like Mad Money’s Cramer also remind viewers that Amazon’s future depends on execution: the days of simply dominating e-commerce are over, and investors now want to see profitability alongside innovation.

Outlook and Forecasts

Looking forward, Wall Street’s models have Amazon accelerating again. For 2025, analysts project ~15–20% annual revenue growth over the next few years [78], driven by AWS and ads. The consensus for full-year 2025 EPS is around $7.60 [79] (versus $2.90 in 2023) – reflecting a bounce from 2024’s slowdown. If Amazon meets or exceeds those numbers, the upside could be substantial: some optimistic commentators speculate Amazon’s market cap could eventually approach $3 trillion (nearing the peak of 2021) [80].

Technically, breaking above the 2025 high near $242 is seen as a key hurdle. Many traders note that if AMZN can hold above this level, it could test the mid-$260s targets and beyond [81]. However, at ~33–34× forward earnings, Amazon trades at a premium to the S&P 500. Most analysts stress that Amazon still needs “solid execution” – i.e. continued cloud momentum and margin control – to justify higher prices [82].

In the near term, Q4 guidance will be critical. Investors will watch if Amazon scales back CapEx or warns of retail softness. Competitors (Microsoft, Google) are busy themselves with AI spending and cloud deals, so Amazon must keep pace to avoid falling behind in market share. One wildcard is the broader economy: if consumer spending weakens (e.g. due to higher rates), Amazon’s retail sales could slow, which might pressure margins. Conversely, any easing of inflation or tariffs could give the company a windfall.

In summary, as of Oct. 30, Amazon is again at a crossroads. The latest earnings beat and strategic initiatives have lifted sentiment, but the bar is high. With nearly all analysts bullish and the stock bouncing off October lows, many see current prices as an attractive entry point – provided AWS and advertising continue to fire on all cylinders [83]. As one TS2 analyst put it, Amazon “appears to have rebounded” into a range that traders view as a good “buying opportunity” if its growth story holds [84]. Whether Amazon can maintain this momentum – and keep pace with peers in the AI race – will determine if it can reclaim its spot among the tech titans, or remain in tech’s second tier.

Sources: Recent news and analysis from TechStock² (TS2.tech) [85] [86], Reuters reports [87] [88] [89], Business Insider [90] [91], GeekWire [92], and earnings releases. [93] [94] (All facts quoted above are drawn from these sources.)

Jim Cramer: 'I like that Amazon’s never done trying to make you money'
Watch this video on YouTube.

References

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Marcin Frąckiewicz Latest posts

CEO of TS2 Space and founder of TS2.tech. Expert in satellites, telecommunications, and emerging technologies, covering trends in space, AI, and connectivity.

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