Amazon (AMZN) stock closed 6% higher on Friday after the company reported stronger revenue and earnings per share for the third quarter than Wall Street expected.

The company said on Thursday that it expects revenue in a range of $181.5 billion to $188.5 billion in the fourth quarter. Analysts had forecast $186.36 billion in revenue for the quarter. Meanwhile, Amazon said operating income is expected to be between $16 billion and $20 billion during the fourth quarter. Wall Street had projected $17.49 billion.

In the third quarter, Amazon posted earnings per share of $1.43 on revenue of $158.9 billion. Analysts had expected earnings per share of $1.16 on revenue of $157.29 billion. Meanwhile, Amazon’s closely tracked Amazon Web Services unit tallied revenue of $27.45 billion in the quarter, roughly in line with Wall Street’s projections.

“You’ve got the ingredients you needed for the stock to go up,” Arun Sundaram, CFRA senior equity research analyst, told Yahoo Finance.

Sundaram pointed to Amazon’s 11% operating margin, which came in above Wall Street’s expectations of 9.34%, as another key driver of the stock’s move higher after hours. Arun noted that Amazon is able to pull on other levers in its business, like its e-commerce unit or advertising, to help grow margins while it spends on AI.

Amazon’s earnings follow a volatile few trading sessions for Big Tech companies amid other earnings reports as artificial intelligence spending and how each company is managing it has been in particular focus. Alphabet (GOOGL, GOOG) exceeded expectations on the top and bottom lines and posted impressive gains in its cloud and advertising segments, business lines that compete with Amazon.

Meanwhile, Microsoft and Meta (META) had a tougher going. The stocks of both tech giants fell after their earnings Thursday, as investors were spooked by an increase in AI spending, despite both companies beating expectations after the bell on Wednesday.

Meta notably said the company expects significant capital expenditure growth in 2025. On Thursday night, Amazon said it expects to spend $75 billion in capital expenditures in 2024 and CEO Andy Jassy said the company expects to spend “more than that” in 2025. In 2023, Amazon’s capital expenditures were $48.4 billion. Jassy said the increased spending is driven by generative AI, which he described as a “maybe once-in-a-lifetime type of opportunity.”

“The faster we grow demand, the faster we have to invest capital in data centers and networking gear and hardware,” Jassy said on the earnings call when explaining why spending continues to grow. “And of course, in the hardware of AI, the accelerators or the chips are more expensive than the CPU hardware. And so we invest in all that up front, in advance of when we can monetize it with customers using the resources.”

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