Jassy Bets Big on AI Agents as AWS Surges 22%

Amazon’s latest results, announced Thursday (Oct. 30th) after the bell, gave investors and analysts a snapshot of how AI is powering and fine-tuning everything from eCommerce to enterprise customers operations.

And the company is making headway in its grocery efforts as well, management said during the Thursday evening conference call.

Consolidated revenues were up 12% to $180.2 billion.

AI was the star of the show, as demonstrated by AWS’ double digit growth rate that outpaced that of the overall company.

During his remarks on the conference call with analysts, CEO Andy Jassy said that “AWS is growing at a pace that we haven’t seen since 2022.” That business line saw 20% year-over-year growth to $33 billion and is now on a $132 billion annualized run rate. Backlog has grown to $200 billion as of the end of the latest quarter, and does not, said Jassy, reflect new as-yet unannounced new deals in October, which, he said, are “more than our total deal volume for all of Q3.”

As he told analysts, “AWS is gaining momentum. Customers want to run their core and AI workloads in AWS given its stronger functionality, security, and operational performance. And the scale I see in front of us gives me significant confidence in what lies ahead.” He added that “a lot of the future value companies will get from AI will be in the form of agents.

“AWS is heavily investing in this area … companies will both create their own agents and use agents from other companies. For those building their own, it’s been harder to build than it should be. It’s why we launched Strands to make it much easier to create agents from any foundation model that builders desire,” said the CEO.

AgentCore’s SDK has been downloaded over a million times, Jassy said. To that end, the company has doubled the power capacity that AWS had three years ago and is on track to double again by 2027.

The stock was up 11% in after hours trading on Thursday.

eCommerce Keeps Growing

With a nod to the eCommerce business, where product sales came in at $74 billion versus $67.6 billion a year ago, Jassy said that the company is offering 14% more selection than a year ago, and said that “Everyday Essentials continues to grow quickly, and year to date is growing nearly twice as fast as the rest of the business … The team also invented a new add to delivery button that lets customers add items to previously scheduled orders, and it’s been used more than 80 million times since launch — and it’s just launched.”

On the consumer facing AI initiatives, the digital shopping assistant Rufus is now tied to 250 million active customers, up 140% year over year. “Customers using Rufus during a shopping trip are 60% more likely to complete a purchase. Rufus is on track to deliver over $10 billion in incremental annualized sales,” Jassy said.

Elsewhere, Amazon Ads, logged $17.6 billion in sales in the quarter and gained 22% year over year.

CFO Brian Olsavsky said during the call that more than 1.3 million sellers have used Amazon’s generative AI capabilities to more quickly launch high quality listings.

Groceries Filling the (Online) Carts

The CFO told analysts that consumers are using the platform for more of their daily needs, including groceries, both online and through Whole Foods.

“By leveraging our existing infrastructure, we’re now offering US customers the ability to order perishable groceries and receive them the same day in as little as five hours. We’re seeing positive early results. Since launching in January, when customers start shopping fresh groceries on Amazon, they are visiting the site more often and returning twice as often as non perishable shopper,” he said.

On the call, Jassy said, “we’ll expand our Whole Foods physical presence over the coming years. And I’m also very excited about a new concept daily shop that we have, which is a smaller version of Whole Foods in urban setting – there are three that we’ve launched. They’re off to very good starts that you should expect to see more of as well … if you think about how many of our customers are buying from us multiple times a week and, who are buying things like shampoo or detergent or taper cups or water, where the ability to add milk and eggs and yogurt and other perishables to their order and have it show have it live in the same shopping cart and then show up a few hours later…[that] is very compelling.”

“The tradition of the weekly grocery stock up is changing. And I think we’re a big part of that,” he said.