Amazon Reports Strong Third-Quarter Growth

By Patricia Miller

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Amazon's Q3 revenue surged, driven by strong e-commerce and AWS performance, with positive projections for the fourth quarter ahead.

White Amazon logo on shop window.

What You Need To Know

Amazon.com Inc. (NASDAQ: AMZN) demonstrated robust financial performance in the third quarter, achieving an 11% revenue increase to $158.9 billion, exceeding forecasts. The company recorded an operating profit of $17.4 billion, significantly higher than the anticipated $14.7 billion. Key drivers of this growth include e-commerce, advertising, and Amazon Web Services (AWS), which saw a 19% revenue boost to $27.5 billion and generated an operating income of $10.4 billion. The online retail segment increased its earnings by 7% to $61.4 billion, while advertising revenue experienced a substantial 19% rise to $14.3 billion.

Despite a 7.2% rise in operating expenses to $141.5 billion, Amazon has outpaced cost increases for seven consecutive quarters. Its workforce grew by 3%, reaching over 1.55 million employees. Following these results, Amazon’s stock appreciated by approximately 5% in after-hours trading, marking a 23% gain for the year.

Looking ahead, Amazon anticipates fourth-quarter operating income of about $18 billion and revenue projections reaching up to $188.5 billion. CEO Andy Jassy emphasized a focus on infrastructure with a planned $75 billion in capital expenditures for technology and artificial intelligence data centers.

Why This Is Important for Retail Investors

  1. Strong Growth: Amazon's third-quarter revenue growth indicates consistent demand and financial health.

  2. Diverse Revenue: E-commerce, advertising, and Amazon Web Services (AWS) drove substantial gains, underscoring Amazon's varied and profitable income sources.

  3. Cost Efficiency: Seven consecutive quarters of cost management showcase Amazon's disciplined approach to balancing growth with expenses.

  4. Positive Outlook: Projected fourth-quarter operating income around $18 billion signals sustained momentum for upcoming earnings.

  5. Strategic Investment: A $75 billion capital expenditure on technology and AI infrastructure supports future growth in data-driven services.

  6. Investor Confidence: With a 23% stock gain for the year, Amazon’s performance reinforces its appeal as a resilient, growth-oriented investment.

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IMPORTANT NOTICE AND DISCLAIMER

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Patricia Miller does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Patricia Miller has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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