Amazon Stock Surges 14% on Strong AWS Cloud Growth
Amazon's Q3 2026 earnings report sent its stock soaring 14% in after-hours trading as investors praised strong growth in the company's AWS cloud division. The division, which represents a smaller portion of total revenue, now accounts for the majority of Amazon's operating profit.
The growth was driven by generative AI workloads, with customers deploying inference models and fine-tuning on AWS infrastructure. Additionally, Amazon's own AI chips reduced its dependency on NVIDIA, improving unit economics. The company's core e-commerce business grew modestly, but advertising accelerated as merchants spent heavily to reach the 200+ million Prime members.
Amazon landed in the middle of market divergence on AI spending, with Meta spending aggressively and facing stock pressure, while Microsoft gained applause for disciplined capex and strong cloud returns. Amazon's AWS results proved that heavy infrastructure investment can return profit in the near term, not just theoretical long-term upside.