Amazon shares jumped roughly 10% in after-hours trading, reaching their highest level since early June, after the company reported stronger-than-expected cloud revenue and raised its capital spending plans to fund an aggressive expansion of artificial intelligence infrastructure.
The rally lifted the stock to around $258, as investors responded to accelerating growth at Amazon Web Services, the company’s cloud computing division and its most profitable business. The results eased concerns that Amazon’s soaring outlays on data centres and AI capacity would weigh on returns.
Chief Executive Andy Jassy used the earnings update to defend the company’s expanded investment strategy, arguing that surging demand for AI services justifies the heavy spending. He framed the buildout as essential to capturing what the company views as a generational shift in enterprise computing.
Amazon lifted its capital expenditure plan alongside the quarterly report, signalling that outlays on servers, chips and facilities will continue to climb. The move underscores an industry-wide race among the largest technology firms to secure the computing power needed to train and run advanced AI models.
The reaction marks a notable turnaround from earlier in the year, when Amazon’s ambitious spending plans rattled investors and pressured the stock. This time, the strength of cloud sales appeared to reassure the market that demand is keeping pace with the investment.
AWS has emerged as a central battleground as Amazon competes with rivals to supply the infrastructure underpinning the AI boom. Growth in the division had faced questions in recent quarters, making the latest acceleration a key signal for investors weighing the payoff from the company’s expenditure.
The spending push comes as major technology companies collectively commit tens of billions of dollars to AI capacity, betting that enterprise and consumer demand will sustain the buildout. Analysts have watched capital expenditure figures closely as a gauge of confidence across the sector.
For Amazon, the cloud unit remains the engine driving the case for continued investment. Robust demand there provides the financial cushion to fund expansion while supporting overall profitability.
The company is expected to maintain its elevated spending trajectory in the coming quarters as it races to bring new capacity online. Investors will be watching whether cloud growth can keep validating the scale of Amazon’s AI bet.