LOS ANGELES (AP) — Amazon reported a rise in quarterly profit Thursday and beat revenue estimates, sending the company’s shares higher in after-hours trading.

For the three months ended September 30, the Seattle-based tech giant posted revenue of $158.9 billion, higher than the $157.28 billion analysts expected.

Amazon said it earned $15.3 billion, more than the $12.21 billion that industry analysts polled by FactSet expected. Amazon earned $9.9 billion during the same period last year. Earnings per share were $1.43, higher than analyst expectations of $1.14.

Net sales increased 11% compared to the third quarter of 2023, Amazon said.

Thursday’s report provides a final look at Amazon’s operations before the start of the holiday shopping season, the busiest time of year for the retail industry.

“As the holidays arrive, we are excited about what we have in store for our customers,” said Andy Jassy, ​​president and CEO of Amazon. “We kicked off the holiday season with our biggest ever Prime Big Deal Days and the launch of an all-new Kindle lineup that significantly exceeds our expectations; and there is so much more to come.”

The company said it expects fourth-quarter revenue to be between $181.5 billion and $188.5 billion, compared with the $186.29 billion forecast by analysts.

The better-than-expected earnings come after Amazon missed revenue estimates last quarter.

Amazon reported that its core online retail business generated $61.41 billion in revenue in the third quarter. These figures include sales from the company’s popular Prime Day shopping event held in July. While Amazon is not disclosing how much revenue will come from the 48-hour shopping bonanza, the company said this year’s event resulted in record sales and more items sold than ever before.

The e-commerce company hosted another discount shopping event for Prime members earlier this month, a strategy it rolled out two years ago to get ahead of the holiday shopping season. Sales for that event will be included in Amazon’s fourth-quarter earnings report.

The company’s results follow other earnings reports this week from tech giants such as Microsoft, Meta and Google’s parent company, Alphabet.

Amazon Web Service, the company’s cloud computing unit and a key driver of its artificial intelligence ambitions, reported a 19% increase in revenue to $27.5 billion. The revenue increase comes as the company, like others of its caliber, ramps up investments in data centers, AI chips and other infrastructure needed to support the technology.

On a call with reporters in August, Amazon Chief Financial Officer Brian Olsavsky noted that the company spent more than $30 billion on capital expenditures in the first half of the year, with most of that spent on AWS infrastructure. These investments were expected to increase in the second half of the year, he said.

Just this month, Amazon said it is investing in small nuclear reactors, following a similar announcement from Google, as both tech giants look for new sources of carbon-free electricity to meet rising demand from data centers and generative AI. Meanwhile, the company last month signed a multi-year deal with chipmaker Intel, which will make a number of custom AI chips for AWS, in addition to the chips it already produces itself.

Amazon’s capital expenditures rose year-over-year from $12.48 billion to $22.62 billion, largely driven by its investments in technology infrastructure such as data centers and Nvidia GPUs used for AI.

During an earnings call Thursday afternoon, Jassy said Amazon is using generative AI “pervasively” across its businesses, including AI-powered shopping in parts of Europe, Canada and the United States. Amazon also recently introduced AI consumer shopping guides that help customers find products, he said, as well as an AI assistant that “provides customized business insights to increase productivity and drive seller growth.”

“The increases here are actually driven by generative AI,” he said on the call.

Jassy told investors that both AWS and AI require the company to invest upfront in data centers, networking equipment and hardware. Many of these assets – such as data centers, he said – could be useful for decades.

“It’s really an unusually large, perhaps unique opportunity,” he said, “and I think our customers, the company and our shareholders, in the long run, will feel good that we’re aggressively pursuing it. .”

Regulators have been scrutinizing Amazon’s other partnership with AI startup Anthropic, which uses AWS as its primary cloud provider and the company’s custom chips to build, train and deploy its AI models. Amazon got some good news in September when the British competition authorities approved its partnership with Anthropic.

However, the relationship and others like it remain under scrutiny in the US by the Federal Trade Commission. Led by Big Tech critic Lina Khan, the FTC has filed an antitrust lawsuit against Amazon, alleging the company stifles competition and overcharges sellers on its e-commerce platform.