The Motley Foolยท2025-11-10 09:56Core Insights - Amazon's cloud business, AWS, experienced its fastest revenue growth in nearly three years, driven by advancements in artificial intelligence [6][4] - The company is on track to potentially reach a market capitalization of $3 trillion, given its current momentum and performance [2][16] AWS Performance - AWS generated a record $33 billion in revenue during Q3 2025, marking a 20% year-over-year increase, up from 17% in the previous quarter [6] - The growth in AWS is attributed to the adoption of AI technologies and the use of Amazon's proprietary chips, such as Trainium2, which reduced AI training costs by up to 40% [4][5] Financial Metrics - AWS accounted for 18% of Amazon's total revenue of $180 billion in Q3, but contributed 65% of the company's operating income, highlighting its role as a profitability driver [9] - Amazon's earnings per share reached $1.95 in Q3, a 36% increase from the previous year, surpassing Wall Street's estimate of $1.57 [13] Market Position - Amazon's current market capitalization stands at $2.6 trillion, with a potential path to $3 trillion based on projected earnings growth [2][14] - The stock is trading at a price-to-earnings ratio of 35.1, which is comparable to the Nasdaq-100 index's P/E of 34.7, indicating it is fairly valued relative to peers [14] Strategic Initiatives - The company plans to invest $125 billion in AI data center infrastructure by 2025, with a significant order backlog of $200 billion indicating strong demand for AWS services [8] - Efficiency improvements in the e-commerce segment, including the use of over 1 million robots, are aimed at enhancing profit margins [12][10]