from Amazon The cloud computing unit posted faster third-quarter growth than analysts expected.
Revenue was $45.98 billion, up 39% year over year and above the consensus of $45.29 billion among analysts surveyed by StreetAccount, according to a statement. In the second quarter, growth was around 37%.
“Our core compute and storage revenues grew at their fastest pace in several years,” Amazon CEO Andy Jassy said on a conference call with analysts. AWS’s growth rate was the highest since the fourth quarter of 2021.
Amazon remains the leading cloud in terms of revenue, but growth has also accelerated among its competitors Alphabet and Microsoft. Wednesday Alphabet said Google Cloud business, which includes Google Workspace infrastructure and subscriptions, more than doubled in the third quarter.
All the major clouds have rushed to build data centers capable of meeting the high demand for artificial intelligence. During the quarter, AWS announced plans to expand its portfolio of Nvidia graphics processing units capable of handling AI workloads.
AWS also acquired data analytics startup DuckLabs and signed deals with Meta and OpenAI, according to the release.
The AWS segment generated $17.77 billion in operating income in the third quarter, up 55% and above the StreetAccount consensus of $16.97 billion.
The unit now accounts for nearly 23% of Amazon’s revenue, a record.
On Wednesday, Microsoft released its first earnings report which contained its Azure cloud revenue in dollars. Azure is 72% of AWS’s size, up from 58% two years ago.
AWS preceded Azure and Google Cloud Platform, with its first services appearing in 2006.
“With our continued pace of innovation, new core and AI capabilities, enterprises wanting to run their core and AI workloads in AWS, and the amount of capacity we add each year, we believe AWS can grow north of 40% in 2027 and 2028, and generate $1 trillion in revenue over the next five to 10 years,” Jassy said.
Google has increased its cloud revenue by making its tensor processing units for AI available outside of its own facilities. Amazon will now adopt this strategy with its Trainium chips for training models.
“With such strong demand for Trainium, customers continue to encourage us to make it available outside of AWS. We intend to do it at the end of 2027,” Jassy said.
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