Investors have asked one big question about artificial intelligence (AI) over the past year: Will all of the spending pay off? Tech giants have poured hundreds of billions of dollars into data centers, chips, and power, and during the most recent earnings seasons, shareholders have started to look for proof that customer demand justifies the bill.
Amazon (AMZN -0.35%) just delivered some of the best evidence yet. In the third quarter, revenue growth at Amazon Web Services (AWS), the world’s No. 1 cloud services provider, accelerated to its fastest pace in nearly five years. For a business that now generates more than $180 billion in annual revenue, that’s a remarkable feat.
The stock didn’t exactly celebrate, though. Amazon shares declined in the following trading session as investors focused on the company’s enormous spending plans. So let’s take a closer look at what AWS accomplished, what’s behind it, and what it means for you as an investor.
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