New Delhi, India | October 31, 2025- The growth in its cloud division, Amazon Web Services (AWS), lifted investor confidence and pushed the stock up 14% in after-hours trading, marking one of its strongest rallies in years.

The tech giant said its cloud unit grew by 20% in the third quarter ending September, its fastest pace since early 2022. The stronger results helped Amazon project fourth-quarter net sales between $206 billion and $213 billion, above analysts’ estimates of around $208 billion.

Chief Executive Andy Jassy said the rebound in AWS reflects booming demand for artificial intelligence (AI) and cloud computing infrastructure. “We continue to see strong demand in AI and core infrastructure,” Jassy said. “We’ve been focused on accelerating capacity and investing to meet that demand.”

AWS remains the company’s biggest profit engine, accounting for roughly 60% of its total operating income. Although it contributes only about 15% of overall revenue, its performance is critical to Amazon’s financial health. The latest results show that AWS is once again driving growth after a period of slower expansion.

The strong earnings also helped lift Amazon’s market value by about $330 billion. If the rally continues in regular trading, it would mark the company’s largest one-day percentage gain since 2015. Investors welcomed the results as a sign that Amazon is regaining momentum after lagging behind other major tech firms earlier this year.

Amazon’s cloud growth comes at a time when companies around the world are investing heavily in AI technologies. Businesses are spending more on computing power and data storage to train and operate AI systems, creating massive demand for cloud services. That trend has benefited major players like Amazon, Microsoft, and Google.

Microsoft and Google both reported solid gains from their cloud divisions this week, reinforcing the strength of the broader AI-driven technology boom. Analysts said the industry’s heavy investment in chips, data centers, and infrastructure shows no sign of slowing.

Chief Financial Officer Brian Olsavsky said Amazon plans to keep spending aggressively on technology. He estimated that full-year capital expenditures will reach about $125 billion, mainly to support AI projects. He added that next year’s spending will likely be even higher, though he did not give specific figures.

Advertising also continued to grow strongly for Amazon. Revenue from ads rose 24% from a year earlier to $17.7 billion, as the company expanded sponsored product listings and introduced more ad spaces across its devices and platforms. Jassy said advertising and retail would remain key growth areas in the months ahead. “We have momentum across several parts of our business,” he said. “We can continue to grow at this pace for some time.”

Despite the upbeat results, Amazon faced a few challenges during the quarter. The company took a $1.8 billion charge related to severance costs after announcing 14,000 corporate job cuts. The layoffs are part of a broader plan that could reduce around 30,000 roles in total. Still, Amazon added 32,000 employees in the same period, bringing its workforce to 1.58 million.

Jassy said the layoffs were aimed at simplifying operations rather than cutting costs. “Our rapid growth created too many layers,” he said. “It can slow down decision-making, and we want to stay nimble.”

The company also recorded a $25 billion charge to settle a case with the Federal Trade Commission. The settlement followed allegations that Amazon misled customers about Prime memberships. Despite the large expense, analysts said it is unlikely to have a lasting financial impact.

Industry analysts said the strong cloud performance confirms that Amazon has turned a corner after months of underperformance compared with its peers. “The report shows Amazon’s fundamentals remain solid,” said Ethan Feller, a strategist at Zacks Investment Research. “The company’s growth story is back on track.”

The wider tech sector also received a boost from Amazon’s results. Investors view the latest earnings from Amazon, Microsoft, and Google as evidence that AI-related spending continues to fuel the economy. Federal Reserve Chair Jerome Powell recently said the AI surge does not appear to be a speculative bubble, noting that today’s leaders have real earnings and solid business models.

With AWS showing renewed strength and AI investments accelerating, Amazon looks poised for a strong finish to the year. As the holiday season approaches, the company is counting on steady demand across its cloud, retail, and advertising businesses to maintain its upward trajectory.