• by Sarah Mahoney , Yesterday

While tech investors had plenty to fret about this week, Amazon’s performance wasn’t one of them. The company turned in a third quarter well ahead of expectations, with net sales climbing 13% to $180.2 billion, up from $158.9 billion in the same period last year. North American sales rose 11%. Net income jumped to $21.2 billion, compared with $9.9 billion a year ago.

Advertising services surged 24% to $17.7 billion, extending Amazon’s lead in digital media. CEO Andy Jassy told investors that “every single” ad product grew in the quarter, crediting the company’s full-funnel strategy.

Brad Jashinsky, senior director analyst at Gartner, called the ad results “incredibly impressive,” given how quickly Amazon has expanded its ad stack. “Only a few years ago, Amazon Advertising was primarily viewed by brands as a low-funnel conversion channel,” he tells Marketing Daily via email. He expects momentum to continue, fueled by new partnerships with Netflix and Roku and upcoming live sports integrations — including the NBA, Masters Golf, and NFL — “many of which aren’t reflected in this quarter’s performance.”

Amazon Web Services also exceeded expectations, with revenue up 20% to $33 billion. That’s its fastest growth since 2022 and a sign the company is maintaining its AI edge and working fast to expand capacity. “We believe investors have regained comfort in management's ability to retain a leading position in the AI space,” wrote Wedbush analyst Scott Devitt, who predicted a “positive narrative shift” ahead.

Those gains come as rivals like Meta and Microsoft face investor backlash over AI spending.

During the earnings call’s Q&A, Jassy addressed the company’s recent layoffs, saying 14,000 of its 350,000 corporate roles — roughly 4% — were eliminated not for financial reasons but to “remove layers” and speed decision-making.

And despite widespread fears of a consumer slowdown, Amazon issued a bullish forecast, projecting fourth-quarter sales between $206 billion and $213 billion — up 10% to 13%.

Jashinsky noted that with Gartner research showing consumers expect higher prices and fewer discounts, Amazon could stand to benefit as shoppers hunt harder for value and selection.

One surprise in the report came in grocery. Amazon said Whole Foods Market “is growing faster than the grocery category,” with improving profitability driven by expanded same-day delivery for perishables. “Amazon hinted that success with perishables has changed its thinking about the importance of growing physical grocery locations,” Jashinsky added. “Competition with Walmart in grocery is going to intensify next quarter and into 2026.”