Adam Selipsky, Amazon Web Services CEO
Source: CNBC
Amazon said Thursday that its cloud unit grew revenue 12% year over year in the third quarter. Analysts had expected a more rapid performance for the world’s top provider of computing and storage services delivered from faraway data centers.
The outcome suggests that the category, one of the liveliest parts of the mature information-technology sector, still faces challenges posed by an economy shaken up by rising prices and higher interest rates.
Revenue from the Amazon Web Services division during the quarter totaled $23.06 billion, according to a statement. That’s lower than the $23.20 billion consensus among analysts polled by StreetAccount.
But the segment generated $6.98 billion in operating income, up 29% and considerably more than the StreetAccount consensus of $5.63 billion. Amazon’s entire business generated $11.19 billion in operating income. The AWS operating margin expanded to 30.3%, the widest in two years.
During the quarter AWS started selling its Bedrock service for running generative artificial intelligence models that compose text in response to a few words of human input. And Amazon said AI startup Anthropic would use AWS’ Trainium chips to train models, a process often performed on Nvidia graphics processing units. Amazon said it would invest up to $4 billion in the startup, which will offer models through Bedrock.
Earlier this week Google parent Alphabet reported 22% cloud growth, while the Wall Street projection was around 26%. Microsoft’s Azure revenue increased by 29%, surging past the 26% consensus.
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