The AI counterattack of cloud computing giant Amazon has quietly begun!

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Amazon's cloud computing business is breaking out of its growth slump, achieving its fastest revenue growth since 2022 in the latest fiscal quarter. With large-scale infrastructure investments and focused strategy, Amazon is regaining the initiative in the fierce AI race.

Amazon's previously released financial report shows that Amazon Web Services (AWS) saw a 20% revenue increase in the third quarter, accelerating significantly from 17.5% in the second quarter. Although this growth rate still lags behind Microsoft’s 40% and a similar level for Google’s cloud business, considering AWS’s quarterly revenue scale of $33 billion—far exceeding analysts’ estimates of approximately $23 billion for Microsoft’s Azure—the acceleration already demonstrates strong momentum.

After the financial report was released, Amazon’s stock price surged 13% in pre-market trading, despite company-wide revenue guidance falling short of expectations. This reflects investors’ reassessment of AWS’s business outlook. So far this year, Amazon’s stock has only risen about 1%, significantly lagging behind big tech peers and the S&P 500’s roughly 16% gain.

The market’s expectations for AWS’s accelerated growth are based on a clear logic: In an environment where AI computing power demand far exceeds supply, whoever can build data centers faster will capture more market share.

Aggressive Expansion Locks In Long-Term Customers

Amazon is expanding its AI infrastructure at an unprecedented rate. CEO Andy Jassy revealed that in the past 12 months, the company added 3.8 gigawatts of data center capacity—an electricity scale for AI chips that surpasses any competitor.

CFO Brian Olsavsky said on an analyst call that this quarter’s capital expenditure will reach about $34.2 billion, with a full-year total of $125 billion, and will continue to increase into 2026.

These investments have already begun translating into real orders. This week, Amazon’s $11 billion data center campus built for large model developer Anthropic in Indiana has become fully operational.

Wedbush analysts pointed out in a recent report that sales from Anthropic will contribute nearly 2 percentage points to AWS’s revenue growth this year. While Anthropic is less eye-catching than competitor OpenAI, it has a clearer path to sustainable revenue growth and is expected to become a core AI customer for years to come. Amazon is a major investor in Anthropic.

Focusing On Strengths Highlights Differentiated Competition

Compared with competitors, Amazon has a key advantage in the AI infrastructure race: focus.

AWS is the key to attracting investors to Amazon, as its high profit margin balances the larger but thinner-margin online retail business. This has made cloud computing a priority area for the company’s AI investments.

In contrast, Microsoft faces more dispersed priorities. The company has added AI features to core enterprise software such as Word, Excel, and PowerPoint, driving significant sales growth amid the AI boom. However, this places additional demand on its computing infrastructure, and Microsoft must prioritize meeting commitments to enterprise customers. CFO Amy Hood stated on Wednesday that this priority ordering is constraining Azure’s growth, and expects the growth rate to slow to 37% this quarter.

Balancing Scale and Growth Rate

All major cloud service providers say that demand for AI computing power far exceeds supply, and this imbalance will be difficult to ease in the coming quarters or even longer.

AWS’s slower growth partly reflects the effect of scale: the bigger the baseline, the harder it is to achieve high growth. But even accounting for scale constraints, AWS still has a high probability of making breakthroughs in the coming quarters, and the third-quarter acceleration to 20% revenue growth already suggests this trend.

The premise is that AWS can avoid being constrained by factors such as power and chip supply—which still represents a significant uncertainty. If infrastructure expansion proceeds smoothly, AWS will have sufficient computing power to support growth in the coming months.

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