AWS exceeds Wall Street’s expectations as demand for cloud infra remains high

Amazon’s cloud infrastructure service, Amazon Web Services (AWS), is on track to record its strongest year of growth in three years, fueled by the AI industry’s unprecedented demand for computing power.

AWS is growing 20% year-over-year and ended the third quarter with $33.1 billion in sales through the first nine months of the year, Amazon announced in its third-quarter earnings release on Thursday. The business segment’s operating income increased to $11.4 billion in Q3, up from $10.4 billion at the same point in 2024.

“AWS is growing at a pace we haven’t seen since 2022, re-accelerating to 20.2% YoY,” Andy Jassy, the president and CEO of Amazon, said in the company’s earnings announcement. “We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity — adding more than 3.8 gigawatts in the past 12 months.”

AWS launched an infrastructure region in New Zealand during the quarter and has three more regions in the pipeline.

The cloud infrastructure provider also secured several new deals in Q3 across a variety of industries, including a few notable names in the AI market. In July, AWS partnered with Perplexity to launch the AI browser company’s enterprise product. AWS also partnered with Cursor during the third quarter.

The intense infrastructure demands of AI have also been a boon to AWS’s competitors. OpenAI and Oracle allegedly inked a massive $300 billion cloud compute deal in September that will start in 2027. The pair also made a deal for OpenAI to pay Oracle $30 billion a year for data center services. Last week, Google and Anthropic announced a cloud deal worth tens of billions of dollars.

These huge deals come despite skepticism of how much cloud infrastructure will actually be needed in the future and if the industry is heading into bubble territory. However, it does makes sense for cloud companies like AWS to take advantage of a market where customers are willing to pay big sums for their services.

“You’re going to see us continue to be very aggressive in investing capacity because we see the demand,” Jassy said about investing in AI infrastructure. “As fast as we’re adding capacity right now, we’re monetizing it.”

This news comes two days after Amazon announced it was slashing 14,000 corporate jobs, as it looks to invest more in its AI strategy.