TLDR
- Hedge fund manager Stanley Druckenmiller bought Amazon shares in Q3, making it over 2% of his portfolio
- AWS cloud division revenue jumped 20% year-over-year to $33 billion in latest quarter
- Anthropic partnership fueling cloud momentum as AI startup projects $9 billion in annual recurring revenue
- Adjusted operating margin reached record 12% after removing one-time restructuring costs
- North America sales up 11% to $106 billion while international revenue grew 10%
Stanley Druckenmiller added Amazon back to his Duquesne Family Office portfolio during the third quarter. The billionaire investor made the stock more than 2% of his holdings after previously owning shares for years.
The timing aligns with improving fundamentals at the tech giant. AWS posted its strongest growth rate in recent quarters. Revenue climbed 20% year-over-year to $33 billion.
This growth rate represents an acceleration from previous quarters. AWS had been growing around 17.5% in earlier periods. The pickup addresses investor concerns about Amazon lagging in the AI race.
The AWS improvement stems from strategic partnerships. Anthropic relies on Amazon’s cloud infrastructure for its computing needs. The AI company started this year with $1 billion in annual recurring revenue and expects to hit $9 billion shortly.
Amazon continues investing heavily in AI infrastructure. The company is expanding data centers to meet growing demand. These investments position AWS to capture more AI workload spending.
Retail Operations Deliver Consistent Performance
The core e-commerce business keeps churning out growth. North America revenue totaled $106 billion last quarter, growing 11% year-over-year. International operations generated $40 billion with 10% constant currency growth.
Amazon keeps pushing delivery speed improvements. The company is rolling out rapid grocery delivery in more markets. Robotic warehouses are increasing efficiency across the fulfillment network.
Generative AI tools are being integrated throughout the platform. Both shoppers and third-party sellers can now access these features. The technology helps with product discovery and merchant operations.
Several experimental divisions continue development. Zoox works on autonomous vehicle technology. Project Kuiper builds satellite internet capabilities. These projects burn cash today but could drive future growth.
Profitability Story Takes Center Stage
Margin expansion is reshaping Amazon’s financial profile. The company over-hired during the pandemic years from 2020 through 2022. Subsequent layoffs have created a more efficient operation.
Official operating margin came in below 10% last quarter. That figure included one-time charges for restructuring and regulatory fines. Strip out those expenses and the real margin hit 12%.
This represents the highest adjusted operating margin in company history. The trend should continue as restructuring costs decline. Management appears committed to maintaining leaner staffing levels.
EBIT reached nearly $80 billion over the trailing twelve months. Analysts expect this number to grow as margins expand further. Revenue growth combined with operating leverage creates a powerful profit formula.
The company reported strong cash flow generation alongside the earnings results. Free cash flow metrics improved compared to the same period last year. Amazon’s financial position remains solid as it invests in growth initiatives while improving profitability across business segments.
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