Amazon Web Services Reports 39.3% Growth and $578 Billion Backlog in Q3
Amazon (AMZN) reported strong third-quarter financial results, highlighted by a significant acceleration in Amazon Web Services (AWS). AWS revenue grew 39.3% year-over-year to $46 billion, marking its fastest growth pace in nearly five years. CEO Andy Jassy noted that demand for computing capacity is keeping pace with the company's rapid infrastructure deployment, driven largely by artificial intelligence requirements. The company is managing a massive capital expenditure plan, with approximately $220 billion allocated for this year to build out AI infrastructure. To mitigate investor concerns regarding overcapacity, Jassy pointed to a substantial $578 billion backlog in customer commitments. While free cash flow has turned negative due to these heavy investments, the record operating margin of 13.9% and accelerating cloud revenue suggest a strong path toward converting this backlog into long-term profitability.