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Amazon (AMZN +11%) is surging today after posting blowout Q3 results, highlighted by its largest EPS beat in years. Revenue jumped 13.4% yr/yr to $180.2 bln, the strongest growth since 4Q23. Operating income surged to $21.7 bln, well above guidance of $15.5-20.5 bln, and Q4 guidance was solid, setting up a strong holiday season.

• North America Stores sales grew +11% yr/yr to $106.3 bln, while International rose 14% yr/yr (+10% CC) to $40.9 bln. The Everyday Essentials category is nearly doubling overall business growth YTD, and Prime Day was the biggest ever. AMZN also began rolling out three-hour delivery in select U.S. cities.
• The company is investing $4 bln to expand its rural delivery network and enhancing its Stores segment with AI tools. Its Rufus AI shopping assistant now serves 250 mln customers, driving an estimated $10 bln in incremental annualized sales.
• AWS sales grew 20.2% yr/yr to $33 bln, marking the strongest growth in 11 quarters and a meaningful reacceleration from recent quarters in the high teens. AWS backlog expanded to $200 bln, not including several new deals signed in October that exceed the entire Q3 deal volume. This points to sustained growth momentum into 2026. 
• Advertising Services revenue rose +22% CC to $17.7 bln, maintaining its momentum as Amazon's full-funnel ad strategy and DSP platform gain traction.
• CapEx for AWS reached $34.2 bln in Q3 ($89.9 bln YTD) as AMZN continues investing in AI infrastructure. Full-year FY25 CapEx is expected around $125 bln, rising further in 2026. The increase in 2026 was similar to what we heard from MSFT.

Briefing.com Analyst Insight:

Amazon delivered a knockout quarter with broad-based strength across AWS, Advertising, and its core Retail business. The AWS reacceleration to 20% growth after several slower quarters is particularly encouraging, signaling rising AI-related workloads and renewed enterprise confidence. The strong backlog and improving retail margins make this one of the more balanced growth stories in mega-cap tech. What really stood out to us was the deal volume signed in October, which is not included in backlog. It reminds us a bit of Oracle (ORCL) a couple of quarters ago and then they reported massive backlog in subsequent quarters.