Key Highlights

  • Amazon shares were trading up 6.88% at $267.95, against a prior close of $250.69.
  • The consumer cyclical group was up about 4.5%, so Amazon is outpacing its sector.
  • Third-quarter Revenue of $201.9 billion rose 12% but landed just under the $202.2 billion estimate.
  • AWS revenue grew 39.3% to $46 billion, backed by a $578 billion backlog.
  • Fourth-quarter net sales guidance spans $240 billion to $247 billion.

Affordability Trade and Midterm Relief Lift Amazon Ahead of Its Sector

Amazon (NASDAQ:AMZN) shares were trading up 6.88% at $267.95 on Wednesday, well ahead of the consumer cyclical group, which was up about 4.5%. Stocks rallied after Democrats won control of both the House and the Senate, a result investors read as lowering policy uncertainty. The Dow Jones Industrial Average was up about 2.9%, the S&P 500 about 1.8% and the Nasdaq Composite about 1.9%. Amazon also moved back above its 50-day moving average.

Affordability was a central theme of the election, and the vote has put value-focused sellers in demand. Walmart (NYSE:WMT) was up 4.50%. Crude Oil fell more than 8% on hopes for Iran peace talks, which eases fuel cost worries for a company whose shipping costs rose 11% last quarter.

Some investors also believe large cloud operators could hold up if rules on data centers tighten. Needham argued that higher regulatory barriers would tend to protect established players from new entrants. Local pushback, including in Ohio, keeps that risk alive. The shares sit about 6.7% below their 52-week high of $287.20 and well above the low of $196.00.

AWS Accelerates for a Sixth Straight Quarter, With a $578 Billion Backlog

Amazon Web Services revenue climbed 39.3% to $46 billion in the third quarter, the sixth straight quarter of faster growth. Operating Income reached $17.8 billion at a 38.7% margin, and the contracted Backlog stands at $578 billion.

Management said AI-related revenue is growing at triple-digit rates. Usage of its Bedrock AI service, measured in tokens, rose nearly 17-fold, and commitments tied to its Graviton and Trainium chips have each grown more than twentyfold. Management expects AWS growth above 40% in 2027 and 2028. The consensus price target sits near $321.

AWS competes with Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL), both of which are also higher today.

Stores Hold Steady While Capex Near $220 Billion Weighs on Cash Flow

Group revenue of $201.9 billion rose 12%, and adjusted EPS of $1.89 trailed the $2.01 estimate. Operating income of $28.1 billion rose 61%, a record 13.9% margin. A shift in Prime Day timing trimmed third-quarter growth by roughly 400 basis points.

North America sales reached $112.9 billion, up 6%, at a 7.7% margin, while international sales hit $43.1 billion. Advertising revenue grew 12% to $19.6 billion.

Capital spending was $75.9 billion in the quarter, with full-year outlays still expected near $220 billion, mostly for AWS, and a higher figure planned for 2027. Amazon has a market Capitalization of $2.89 trillion, a forward P/E of 27.13, a trailing P/E of 21.64 and trailing EPS of $12.43.

Fourth-Quarter Guidance, Fuel Costs and Data-Center Rules Set the Next Test

Amazon guided fourth-quarter net sales to $240 billion to $247 billion and operating income to $28.5 billion to $33.5 billion, including a currency drag of about 60 basis points. Fuel and linehaul Inflation is expected to run slightly higher.

Today’s gain reflects relief on policy and prices more than a change in the Earnings picture. The next markers are delivery against fourth-quarter guidance, the path of oil and shipping costs, the pace of Capital spending, and whether state-level data-center rules reach cloud buildouts.