On Thursday, Amazon.com, Inc. (NASDAQ:AMZN) drew sharply different reactions after its third-quarter earnings report, with analysts highlighting booming AI demand and AWS growth.
Amazon shares fell 4.25% to close at $243.79 during Thursday’s regular session and dropped another 7.30% to $225.99 in after-hours trading, according to Benzinga Pro.
Amazon’s AI Infrastructure Spending Draws Attention
Shay Boloor, chief market strategist at Futurum Equities, highlighted CEO Andy Jassy’s comments that Amazon is installing an AI accelerator roughly every 14 seconds, with customers absorbing computing capacity almost as quickly as AWS brings it online.
“And somehow we’re still debating whether Amazon is spending too much on AI,” he wrote on X.
In a separate post, he pointed to Amazon’s deployment of more than 1 million warehouse robots and its plans to automate the final stretch of deliveries.
He argued that even modest reductions in delivery labor costs could significantly improve retail margins at Amazon’s scale.
AWS Growth Accelerates, But Other Businesses Face Pressure
Futurum Group CEO Daniel Newman highlighted AWS’ growth of more than 39%, its fastest pace in five years. However, he cautioned that the strength in AI and cloud computing was accompanied by weakness elsewhere in Amazon’s business.
“AI is full steam but the business around it is softening,” Newman said.
CNBC’s Jim Cramer also offered a positive assessment, writing that despite a difficult trading session, “Amazon and SBUX were very, very good.”
Gene Munster Sees Amazon’s Future Beyond Retail
Deepwater Asset Management managing partner Gene Munster said Amazon’s management appeared intent on positioning the company as an AI data center and semiconductor powerhouse rather than primarily a retailer.
He highlighted management’s projection of more than 40% AWS revenue growth in both 2027 and 2028, alongside Jassy’s expectation that AWS could become a trillion-dollar business within five to 10 years.
Munster said Amazon was signaling that AWS could become “much, much bigger” than Wall Street currently anticipates, noting that analysts project $306 billion in AWS revenue in 2028.
“From the call, it’s clear $AMZN management wants the Street to think of the company as a AI data center and chips company. Forget retail,” Munster said.
Amazon Misses Q3 Estimates, Gives Q4 Outlook
Amazon reported third-quarter revenue of $201.94 billion, missing analysts’ consensus estimate of $202.31 billion. Earnings came in at $1.89 per share, below expectations of $1.97 per share.
For the fourth quarter, Amazon projected revenue of $240 billion to $247 billion, compared with Wall Street estimates of $244.51 billion.
According to Benzinga Edge Stock Rankings, AMZN has weak short-term price trends but positive medium- and long-term trends, alongside a moderate value score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: PJ McDonnell / Shutterstock – ek
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