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Amazon posted higher fiscal third quarter profit and sales compared with a year ago, fuelled by accelerating growth in its cloud computing business and strong spending by its customers looking for low prices at a time when inflation is resurging. The results, announced Thursday, beat Wall Street expectations. The company’s prominent cloud computing arm also surpassed analysts’ expectations, rising 20 per cent. But Amazon issued a cautious sales outlook for the fiscal fourth quarter. Shares, however, soared nearly 13 per cent in after-hours trading. Analysts are analysing Amazon’s results, along with other retailers’ earnings performances, to get insight into how shoppers are spending heading into the holiday season and how the online behemoth is managing cost increases from President Donald Trump’s tariffs. But Amazon, based in Seattle, is also under pressure to shore up confidence among investors that its computing arm Amazon Web Services is just as powerful as Microsoft’s Azure and Google’s Google Cloud platform. Amazon delivered better-than-expected 20 per cent growth for AWS, following a 17.5 per cent growth in the fiscal second quarter. Andy Jassy, president and CEO of Amazon, noted in a statement that AWS is growing at a pace it has not seen since 2022. Last week Amazon grappled with a massive outage of AWS after a problem disrupted internet use around the world for most of the day, taking down a broad range of online services, including social media, gaming, food delivery, streaming and financial platforms. Jassy also noted Amazon is seeing strong momentum and growth across Amazon as artificial intelligence drives “meaningful improvements in every corner of our business”. Amazon is rapidly automating its warehouses, raising big questions on how many workers it will need in the future. In fact, Amazon announced on Tuesday that it was cutting about 14,000 corporate jobs as it ramps up spending on artificial intelligence and cuts costs elsewhere. Late last month, Amazon unveiled a new robotics system – being tested in South Carolina – for its warehouses that coordinates multiple arms to perform picking, stowing, and consolidating tasks simultaneously. This technology effectively collapses three assembly lines into one, the company said. Amazon is also testing an AI agent that helps human managers deploy workers and avoid bottlenecks. The system allows operators to spend less time analysing dashboards and more time coaching teams, creating safer work environments, the company said. Amazon posted net income of US$21.12 billion, or US$1.95 per share, for the quarter ended September 30. That is up from US$15.33 billion, or US$1.43 per share, a year ago. Amazon’s sales rose to US$180.2 billion, up from US$158.88 billion in the year-ago period. The number of items that Amazon sold in the latest period increased 11 per cent, the company said. Amazon said it expects sales for the fiscal fourth quarter to be in the range of US$206 billion to US$213 billion.
