Amazon stock skyrockets over 12% to all-time high on Q3 earnings beat. Check what's fuelling the numbers

Amazon came under the bull’s eye in Friday’s session, October 31, with the stock soaring 12.4% to a record high of $250 apiece on the Nasdaq, following a strong September-quarter earnings beat, driven by robust growth in its cloud and advertising businesses.

The tech and online retail behemoth posted a 20% year-on-year jump in revenue from its closely watched cloud unit, Amazon Web Services (AWS), which rose to $33 billion, surpassing analysts’ estimates of $32.5 billion, as customers continued to spend on AI-related workloads.

Advertising services also remained a key growth driver, generating $17.7 billion during the quarter, well ahead of market expectations.

Looking at the other segments, the revenue from online store sales has also improved by 10% to $67.41 billion, while the revenue from third-party seller services stood at $42.5 billion, a 12% surge.

Overall, Amazon’s total revenue rose 12% year-on-year to $180.2 billion in Q3, contributing to a 10.87% increase over the last twelve months, with cumulative revenue reaching $670.04 billion.

Bullish sales outlook

Along with the strong performance beat, the company also raised its full-year sales forecast, easing fears that the tech giant was falling behind its rivals in the AI race.

Amazon said revenue for the current quarter would be between $206 billion to $213 billion, versus the $208.4 billion average analyst estimate.

On the earnings conference call with analysts, Amazon CEO Andy Jassy said the company has doubled AWS capacity measured by power from 2022 and is on track to double capacity again by 2027.

"We continue to see strong demand in AI and core infrastructure, and we've been focused on accelerating capacity," Jassy said in a press release.

In response to the growing demand, Amazon joined other Big Tech companies in projecting an increase in capital expenditures for the coming year.

The company now expects capital expenditures to come in at $125 billion for the full year and expects capex to increase again next year.

Set to log first record close in nearly nine months

If the stock closes above $241 apiece today, it will mark its first record close in nearly nine months. Today’s rally has lifted its October gains to 13% and represents a 53% recovery from its April low of $161.38 apiece.

In terms of yearly performance, the stock is up 13% so far and is on track to post its third consecutive annual gain.

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