AWS revenue jumps 39 percent and Amazon still misses earnings

Amazon Web Services revenue grew 39 percent to $46 billion in the third quarter, the fastest pace in nearly five years, GeekWire reported Thursday. CEO Andy Jassy said he expects the cloud unit to top 40 percent growth in both 2027 and 2028. That was not enough for investors. Earnings were $1.89 a share, short of the $1.97 analysts expected, as higher interest costs and other losses cut into profit. Operating income was $28.1 billion, above the top of Amazon's own guidance, and the 13.9 percent operating margin was the highest in the company's history. Revenue of $201.9 billion, up 12 percent, was just under analyst estimates and at the top of Amazon's forecast. Shares fell more than 7 percent after hours.

Jassy also said AWS and the stores business could each reach $1 trillion of annual revenue within five to ten years. AWS is at a $184 billion run rate. He pointed to a $578 billion backlog of contracted AWS revenue and said 2026 cash capital spending is still expected at about $220 billion, mostly for AWS, with more in 2027. He repeated on the earnings call that he believes AWS can be a trillion-dollar revenue business, TechCrunch reported.