"Amazon ( NASDAQ:AMZN) didn't gain much in 2025, but a 7% year-to-date gain suggests that the tech giant is turning a new leaf. Amazon Web Services are a key part of the growth story, with artificial intelligence reaccelerating growth. Amazon CEO Andy Jassy told investors in the company's Q3 earnings release that AWS growth rates have returned to 2022 levels, and that has major ramifications for the stock."
"He also said that the company is still seeing strong demand for AI and core infrastructure. Artificial intelligence plays a direct role in AWS's success because AI companies need cloud platforms to manage and store data. AWS also makes it possible to develop AI agents, which will become more valuable in the years ahead. These agents continue to become more advanced and can help with various tasks, such as automated customer service and optimized workflows."
"The resurgence of high AWS growth rates isn't the only catalyst that can turn Amazon into a superb pick for 2026. The company is also using AI to enhance its other product lines. For instance, AI helps Amazon provide personalized product recommendations in its marketplace, and it also results in online ads that generate more clicks. Amazon has multiple business segments in key industries that posted impressive growth rates in Q3. Online advertising revenue increased by 24% year-over-year, while online store sales were up by 10% year-over-year."
AWS growth rates have returned to 2022 levels, driven by renewed demand for artificial intelligence and core cloud infrastructure. Strong AI demand raises demand for cloud platforms to manage and store the large amounts of data required by AI companies. AWS enables the development of AI agents that can automate customer service and optimize workflows, increasing long-term value. Major tech companies are committing increased spending to AI, funneling more workloads to cloud providers. AI adoption is also lifting Amazon's other segments through personalized recommendations and higher ad engagement, with Q3 advertising up 24% and online store sales up 10% year-over-year.
Read at 24/7 Wall St.
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