Amazon reported record profits on Thursday, as cloud computing sales picked up steam and its retail business showed resilience.
Sales from July through September hit $158.9 billion, up 11 percent from the same period a year earlier. Profit rose 55 percent, to $15.3 billion. The results surpassed Wall Street’s expectations.
Amazon’s cloud computing business is continuing to gain steam, driven partly by its artificial intelligence offerings. Amazon Web Services sales grew 19 percent, to $27.5 billion. It accounted for 60 percent of the company’s operating profit.
Profit in the e-commerce giant’s core retail business has faced pressure as consumers shift their spending to lower-cost products and everyday consumable items, like shampoo or dog food, which tend to be less profitable.
Amazon had warned investors last quarter that consumer behavior was particularly tricky to predict in the election season, as a volatile political climate can distract consumers from shopping. Sales in its North America e-commerce business grew 9 percent in the quarter. It produced $5.7 billion in operating profit.
“As we get into the holiday season, we’re excited about what we have in store for customers,” Andy Jassy, Amazon’s chief executive, said in a statement.
The company told investors to expect a strong holiday quarter, with estimated sales reaching as much as $188.5 billion.
Amazon’s stock price jumped more than 5 percent in aftermarket trading.
The quarter included Amazon’s Prime Day in July, which generated $13.7 billion in product sales in 48 hours, according to estimates from Bank of America.
Advertising, which has been a profitable bright spot, posted $14.3 billion in sales, showing a slight slowdown from recent quarters even as the company began offering advertisements in Prime Video, its online streaming service.
The company is spending heavily in a number of areas — it is racing to build data centers that power A.I. and will soon launch low-earth orbit satellites to provide internet connectivity to areas off the grid. Capital expenses rose sharply to $21.3 billion, up 88 percent.
Amazon has also been adding more robotics to its operations as part of its efforts to make its fulfillment and delivery network faster and more efficient. That helps drive down the costs to get orders to consumers, and faster deliveries have typically induced customers to buy more from Amazon, including smaller, everyday orders.
Amazon acts like a “convenience store” for many, according to new research from Consumer Intelligence Research Partners, which found that almost two-thirds of shoppers on the site bought only one or two items at a time.
Shipping costs rose only 8 percent, while the number of items that customers bought was up 12 percent. Executives have said they expect to find more efficiencies by improving how and where they bring inventory into warehouses and by better predicting what customers want.
Amazon typically ramps up its hiring in the fall to prepare for the holiday season. The company had 1.55 million employees, up 3 percent.
Thanksgiving falls late in November this year, creating a shorter holiday shopping season. Investors expect this will help Amazon, as customers turn to quick delivery options.
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