Amazon Stock Sees Breakout Growth as Cloud Business Soars

Amazon's stock has lagged behind the S&P 500 since Jeff Bezos stepped down as CEO in 2021, despite delivering solid results and continued growth. The company's cloud computing business, Amazon Web Services (AWS), reported revenue up 37% to $42.2 billion, its fastest rate in 18 quarters.

This was a key highlight of the breakout earnings report that included its fastest revenue growth in five years. Revenue jumped 20% to $167.7 billion, and operating income up 43% to $27.5 billion. However, Amazon's Prime Day, which shifted from July to June this year, temporarily inflated revenue by approximately 500 basis points.

Investors may want to pause on the company's guidance for revenue growth of just 9%-12% in the third quarter. However, AWS is now the primary source of its operating profit, and the company exceeded a $25 billion annual revenue run rate in both AWS's AI and chips businesses, growing in the triple digits year-over-year.

Amazon's investments in grocery and faster delivery also seem to be paying off. The stock jumped 15.3% on Friday, and after this boom in its cloud business, things are suddenly looking different for Amazon.