Amazon’s stock surged on Thursday after the company reported stronger-than-expected earnings, with its cloud division—Amazon Web Services (AWS)—emerging as the key growth engine fueled by the ongoing artificial intelligence (AI) revolution. The e-commerce and tech giant’s quarterly results signaled a major rebound in its core businesses, particularly cloud computing and advertising.

AI-Powered Momentum Behind AWS Success

AWS, which contributes the largest share of Amazon’s operating income, saw revenue climb sharply as more companies embraced AI workloads and cloud-based training infrastructure. The growing adoption of AI models and data analytics tools by enterprises has led to increased demand for AWS’s compute and storage services. Analysts highlighted that Amazon’s investment in custom AI chips, such as Trainium and Inferentia, has helped reduce costs and attract more developers to its ecosystem.

Strong Financial Performance Lifts Market Confidence

Amazon reported total quarterly revenue that exceeded Wall Street expectations, with a double-digit rise in net income. The company’s stock jumped over 7% in after-hours trading, reflecting investor confidence in its ability to sustain growth in high-margin segments like cloud and digital ads. CEO Andy Jassy noted that “AI is transforming every layer of our business,” emphasizing ongoing investments in foundation models and cloud automation.

Ad Business and E-commerce Rebound Add to Growth

Beyond the cloud division, Amazon’s advertising business also posted record gains as brands increased digital spending amid the holiday season. Meanwhile, the retail segment showed strong international growth, particularly in markets like India and Europe, where new fulfillment centers have improved delivery efficiency. Prime membership numbers also grew, driven by exclusive content and faster shipping benefits.

Amazon’s Future Strategy Focuses on AI and Efficiency

Looking ahead, Amazon plans to integrate AI deeper across all its platforms—from Alexa and logistics optimization to e-commerce personalization. The company also aims to enhance the profitability of AWS by expanding its AI services portfolio and improving operational efficiency through automation. Analysts predict that Amazon could sustain double-digit earnings growth through 2026 if the AI demand trajectory continues.