Amazon stock soars to record high as AWS growth powers Q3 results

Core Insights - Amazon reported strong third quarter earnings, exceeding both revenue and earnings per share expectations, driven by robust growth in its cloud business [1][2] - The company's stock surged 11% to a record high following the earnings announcement [2] Financial Performance - Amazon's earnings per share (EPS) for the quarter was $1.95, surpassing analysts' expectations of $1.58 [2] - Revenue reached $180.2 billion, exceeding the anticipated $177.8 billion [2] - Amazon Web Services (AWS) generated $33.01 billion in revenue, outperforming the expected $32.4 billion [2] AI and Technology Developments - The adoption of Amazon's Trainium2 AI chip has become a multibillion-dollar business, growing 150% quarter over quarter [3] - Amazon launched its Project Rainier AI cluster, which includes 500,000 Trainium 2 chips [3] - Amazon's AI exposure is primarily through Anthropic, which signed a deal to use 1 million custom Amazon chips for AI model training [4] Competitive Landscape - Despite strong earnings, Amazon's stock performance year-to-date is lagging behind Microsoft and Google, with increases of only 2.4% compared to Microsoft's 24% and Google's 49% [3] - Microsoft and Google have established significant AI partnerships, with Microsoft working with OpenAI and Google with its Gemini project, while Amazon shares its AI client Anthropic with Google [4] Corporate Strategy - CEO Andy Jassy emphasized the company's commitment to aggressive investment in capacity to meet demand [2] - The decision to cut 14,000 corporate jobs was attributed to overhiring rather than a shift towards AI automation [5]