Amazon became the latest of the “Magnificent Seven” tech giants to report quarterly earnings on Thursday, with all eyes once again on cloud computing and any sign of a return on vast AI investments. Shares in the e-commerce giant rose in after-hours trading.

The company reported revenue of $158.9bn against analyst expectations of $157.2bn, and earnings per share of $1.43, compared to $1.16 expected by Bloomberg analysts.

Amazon reported $27.5bn for the previous three months, a 19% increase, in line with analysts’ expectations from the cloud computing business.

The pace of growth is faster than the company reported last year, a positive sign for Wall Street. Its advertising business also brought in as much revenue as analysts expected. In August, the company reported that its Amazon Web Services division pulled in $26bn in revenue compared to $22bn for the same period in 2023.

A day earlier Microsoft reported significant growth in its cloud computing division, but that failed to satisfy investors. Shares in the company dropped more than 5% on Thursday. Google reported 33% growth in its cloud business, which led to a modest increase in its stock price.

“Investors need to see the monetization of AI spreading to the rest of the tech landscape,” Wedbush analyst Dan Ives said this week. “The next few weeks will be the linchpin to confirmation that the AI ‘use case phase’ have now begun within the enterprise world.”

Amazon executives have previously said its AI business is on track to generate more than $105bn for the year.

Investors are also watching Amazon’s traditional business – online retail – for signs that consumers are continuing to respond to an optimistic US economic environment.

“Amazon is experiencing strong growth throughout 2024, with momentum for both its core retail business and its efforts to diversify its portfolio,” said Greg Zakowicz, senior e-commerce expert at Omnisend.

“The cost of living crisis has eased for some consumers this year, freeing up disposable income and allowing Amazon to get more cut-through with shopping events like Prime Day or Black Friday than they did last year”, Zakowicz said.

Investors are also looking at Amazon’s effort to rival Elon Musk’s Starlink space-based Internet service, known as Project Kuiper, that plans to place 3,236 satellites into low Earth orbit and then to provide global broadband access.

Industry watchers were hoping to see gains in Amazon’s advertising business. Analysts have warned that deceleration in ad sales coupled with slower-than-expected rollout of ad on Amazon’s Prime Video service could pose risks.