Amazon (AMZN) shares are logging their biggest one-day gain nearly three years after the company delivered its fifth consecutive top- and bottom-line beat, powered by double digit growth in its cloud-computing and retail segments.
The ecommerce giant beat Wall Street’s expectations with a 16% profit increase fueled by sizable gains in online stores, subscription business, and Amazon Web Services.
“Amazon handily exceeded raised analyst expectations for Q3 2025, with its twin growth engine of AWS and Ads humming along beautifully. And as long as the macroeconomic resilience persists, Amazon’s business momentum is likely to remain strong for the foreseeable future,” Seeking Alpha analyst Ahan Vashi, group leader for The Quantamental Investor, summarizes.
Wall Street analysts agree with Amazon CEO Andy Jassy that the quarter was impressive, and that the AWS business – with the assistance of Trainium – will sustain these elevated growth rates “for a while.”
“Amazon was the only hyperscaler that didn’t say Cloud was capacity constrained, after doubling its power capacity since 2022, and gain by 2027,” Needham’s Laura Martin and Dan Medina said in their note to clients.
And while Wall Street was mesmerized by AWS growth, the retail business proved that consumer spending hasn’t capitulated to macroeconomic pressures and a problematic tariff landscape.
Online store revenue increased nearly 10%, and third-party seller services net sales were up 12%, both of which easily topped expectations.
“Amazon.com is one of the few large-cap companies benefitting from the secular shift to e-commerce,” said Oppenheimer analyst Jason Helfstein, noting the company’s deep production selection, low-cost express delivery, and breakthrough success of Kindle, Prime Video, and Amazon Music continues to drive increased market share versus competitors.
Compressed margins were noteworthy, but not problematic as a drop in operating margin was largely attributed to $2.5B charge tied to a settlement with the Federal Trade Commission.
Without this impact, the operating margin would have expanded 100 basis points to 6.9%, Seeking Alpha analyst Kenio Fontes says.
“[The margin compression] would be an extremely bearish point if it were basically such a significant increase in the cost and expense structure to sustain top-line growth that was not that high, but in fact, much of this was more cyclical than structural,” Fontes adds.
So, with business categories firing on all cylinders, investment in AI accelerating, its Prime membership base growing, and robust online advertising business, it’s clear that Amazon’s (AMZN) growth trajectory is entering a powerful new chapter.