AWS Q3 2025 Earnings: Amazon Cloud Performance

Amazon reported Thursday that its Amazon Web Services (AWS) segment delivered a robust 20% revenue increase in the third quarter, surpassing analyst expectations and signaling continued strength in the cloud computing market.

Specifically, AWS revenue for the quarter reached $33 billion, exceeding the StreetAccount consensus estimate of $32.42 billion, which projected an 18.1% year-over-year growth rate. Furthermore, AWS operating income demonstrated resilience, climbing 9% year-over-year to $11.4 billion. This impressive figure constitutes approximately two-thirds of Amazon’s overall operating profit, underscoring the pivotal role AWS plays in the company’s financial performance.

While AWS maintains its position as the leading provider of cloud infrastructure, it faces escalating competition from industry rivals Google and Microsoft, both of which have also recently released their quarterly earnings reports. These competitors are aggressively vying for market share, intensifying the pressure on AWS to innovate and maintain its competitive edge.

Google Cloud reported a substantial 34% revenue increase during the same period, while Microsoft Azure exhibited even more impressive growth, registering a remarkable 40% surge. This dynamic landscape highlights the accelerating adoption of cloud services and the fierce competition among the major players. Analysts are closely watching how AWS responds to these challenges, particularly in areas such as AI-powered services and specialized cloud solutions.

Notably, Amazon’s earnings announcement follows a recent extended outage on AWS, which disrupted services for numerous websites for over 15 hours. Microsoft also experienced outages affecting its Azure cloud and 365 services. While such disruptions are not uncommon in the complex world of cloud computing, they underscore the importance of robust infrastructure and redundancy to ensure uninterrupted service and maintain customer trust.

Adding a layer of strategic significance, Amazon recently inaugurated its $11 billion AI data center, known as Project Rainier, in Indiana. This facility will be crucial for training and deploying AI models. Amazon’s substantial $8 billion investment in Anthropic will see the startup leverage one million of Amazon’s purpose-built Trainium2 chips by the end of 2025. This move signals Amazon’s commitment to becoming a dominant player in the burgeoning AI cloud services market.

Project Rainier could be a decisive factor in refuting the notion that Amazon is lagging behind in securing lucrative AI-related cloud service contracts. The competitive landscape is heating up, with Anthropic deepening its cloud collaboration with Google in a deal reportedly worth tens of billions of dollars. Furthermore, Meta has recently forged significant cloud partnerships with both Google and Oracle, indicating a broad trend of tech giants leveraging cloud infrastructure for AI and other advanced computing needs.