It was no surprise that Amazon shares soared Friday morning after the company’s “Show Me” quarter turned out to be a “huge show of strength” for CEO Andy Jassy, according to CNBC’s Jim Cramer. Amazon reported third-quarter earnings Thursday night, reigniting investor enthusiasm for Amazon Web Services, the world’s largest cloud business. The stock hit an all-time high of more than $250 per share during Friday trading. To close at a new all-time high, the stock would need to end the day just above $242. Revenue from AWS, the company’s profit driver, rose 20% year over year to $33 billion, beating analysts’ expectations for 18% growth. This marks the first time AWS has returned to growth above 20% since 2022, a milestone that marks a return to the offensive for Jassy. “(Jussie) came in very enthusiastically,” Kramer said on “Squawk on the Street” Friday after listening to the CEO on a post-earnings call the night before. “Going back to the last quarter…he was deep in thought, probably sounded like he didn’t quite understand things. This time, he came out of the tunnel and just got jacked,” added Kramer, likening Jussie’s energy to that of an NFL star coming out of the tunnel. AWS’s growth has been the key to the stock’s meteoric rise, with the stock up more than 12% year-to-date. Investors have been concerned for months that the company’s lucrative cloud business is losing ground to No. 2 cloud provider Microsoft Azure and No. 3 Google. AMZN 1D Mountain One day performance of AMZN stock. Kramer believes Amazon’s third-quarter results put those concerns to rest. “This was the quarter where (Jussie) said, ‘Listen bears, listen skeptics, we’re doing much better than other companies, including Microsoft, by the way,'” Cramer said. Later, during a Friday morning meeting for CNBC Investment Club members, Cramer said, “I believe this company is back.” Megacap’s peers, Google’s parent company Alphabet and Microsoft, also reported earnings this week on Thursday and Wednesday night, respectively. Alphabet’s Google Cloud revenue rose 34% to $15.16 billion in the third quarter, while Azure posted 40% growth. Microsoft started posting Azure revenue growth for the first time last quarter. Although the company did not disclose quarterly revenue totals, it was revealed in June that Azure revenue for fiscal 2025 was up 34% year-on-year to $75 billion. While these competitors are growing faster on a percentage basis, AWS is expanding on a much larger revenue basis. This means that even though Google and Azure are smaller, they continue to catch up, making it easier to achieve higher growth rates. Looking ahead, Jassy said that AWS growth continues to show strong momentum. The company’s cloud backlog grew to $200 billion by the third quarter, but that doesn’t include the several unannounced new deals in October that Jassy teased on the phone. As demand for AWS grows, Amazon invests more to keep up and maintain its cloud leadership. Amazon’s total capital investment through 2025 was $89.9 billion. Amazon Chief Financial Officer Brian Olsabsky said he expects full-year capital spending to be about $125 billion in 2025, and expects it to rise again in 2026. Increased spending in the AI race next fiscal year has weighed on other giant-cap peers such as Metaplatform and Microsoft this week on concerns that they will squeeze company profits. However, Amazon’s soaring stock price suggests that increased spending will result in continued growth to ensure AWS’s ability to continue winning against future AI workloads. We maintain a Buy rating of 1 on Amazon stock, as well as our $275 price target, which was raised from $250 on Thursday evening. (Jim Cramer’s Charitable Trust, the portfolio used by the club, owns Amazon, Microsoft and Meta. See here for a complete list of stocks.)
