TLDR:
- Amazon remains dominant in cloud computing with AWS holding 32% market share, though facing growing competition from Microsoft’s Azure
- Q3 2024 earnings expected to show 34.1% YoY earnings growth and 9.8% revenue growth
- Stock currently trading ~6% below 52-week high of $201.20, with analysts projecting 16% upside
- Prime Video ads and Project Kuiper satellite internet initiative identified as key future growth drivers
- Company seeing strong ad revenue growth (+20% YoY) and AWS backlog of $156.6B indicates robust enterprise demand
Amazon heads into its third-quarter earnings report with strong momentum in its cloud and advertising businesses, though investors are closely watching rising costs from new initiatives.
The e-commerce giant is expected to report earnings on October 31, with analysts forecasting earnings per share of $1.14 on revenues of $157.2 billion.
The company’s Amazon Web Services (AWS) division maintained its cloud market leadership position in Q2 2024 with a 32% share, generating $26.3 billion in revenue. This represented an 18.8% year-over-year increase, accelerating from 17.2% growth in the previous quarter. The strong AWS performance comes amid growing competition from Microsoft’s Azure platform.

Amazon’s advertising business has emerged as another bright spot, with ad revenues growing over 20% year-over-year for six consecutive quarters. In Q2 2024, advertising revenue reached $12.8 billion, benefiting from increased digital ad spending as inflation moderates and the Federal Reserve signals potential rate cuts.
The company’s Prime Video streaming service saw viewership surge 12% in September, driven by Thursday Night Football and other content. Amazon plans to expand Prime Video advertising to additional international markets in 2025, including Brazil, India, and Japan.
Project Kuiper, Amazon’s satellite internet initiative, faces both opportunities and challenges. While the project could eventually generate an estimated $36 billion in annual revenues, recent reports suggest costs may reach $16.5-20 billion, significantly above initial $10 billion estimates. Amazon must also deploy half its planned satellites by mid-2026 to meet FCC requirements.
Operating margins remain a key focus for investors. The company achieved a 9.9% operating margin in Q2 2024, near record levels, though increased spending on Project Kuiper and other initiatives may pressure profitability. For Q3, Amazon projects operating margins between 7.3% and 9.5%.
The core retail business continues to face competition from Chinese shopping apps like Temu and Shein, though proposed changes to U.S. customs rules could benefit Amazon by eliminating certain shipping advantages these competitors currently enjoy.
Wall Street maintains a largely bullish outlook on Amazon stock, which closed at $189.07 on Monday. Analysts have set an average price target of $219, suggesting 16% upside potential.
The company’s strong AWS backlog of $156.6 billion and growing high-margin advertising business support optimism about future growth.
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