Why Amazon Rallied in October

Core Insights - Amazon's shares increased by 11.2% in October despite initial struggles due to U.S.-China tensions, with a significant rally following better-than-expected earnings on October 30 [1][3] Financial Performance - In Q3, Amazon reported a revenue growth of 13.4%, reaching $180.2 billion, and earnings per share rose by 36.4% to $1.95, both surpassing expectations [3] - Amazon Web Services (AWS) experienced a notable growth of 20.2%, the highest since 2022, and an acceleration from the previous quarter's 17% growth [3][4] AWS Developments - Concerns about AWS losing market share were alleviated as the segment showed strong growth, indicating Amazon's competitive position in the AI space [4] - Amazon added 3.8 gigawatts of data center power in the past year, more than any other cloud provider, and launched Project Rainier, a significant AI data center featuring nearly 500,000 Trainium2 chips [5] Strategic Partnerships - Project Rainier is utilized by Anthropic, a generative AI startup backed by Amazon, which has gained favorable attention and market share compared to OpenAI [6] E-commerce Performance - Amazon's e-commerce segments also performed well, with third-party sales accelerating to 11% and advertising revenue increasing to 22% [7] Operating Margins - Without the impact of an FTC settlement and severance payments, North American operating margins would have been 6.9%, a full percentage point higher than the previous year [8]