Before Amazon reported its third-quarter 2023 results on October 26, analysts expected AWS revenue of $23.19 billion, about 13% higher year over year. That forecast suggested growth might be leveling off after a sharp slowdown, but it was an expectation—not the reported result. The preview also put AWS’s AI monetization and Amazon’s ties to Microsoft and Anthropic under scrutiny, as CRN reported ahead of the earnings release.
What did analysts expect AWS to report?
Zacks Investment Research consensus, as cited in CRN’s October 26, 2023 preview, put AWS third-quarter sales at $23.19 billion, representing roughly 13% year-over-year growth. The estimate pointed to continued expansion, but at a much slower pace than AWS had posted a year earlier.
| Quarter | AWS sales | Year-over-year growth | Status in the October 2023 preview |
|---|---|---|---|
| Q3 2022 | $20.5 billion | 27% | Reported prior-period figure cited by CRN |
| Q4 2022 | $21.4 billion | 20% | Reported prior-period figure cited by CRN |
| Q1 2023 | $21.4 billion | 16% | Reported prior-period figure cited by CRN |
| Q2 2023 | $22.1 billion | 12% | Reported prior-period figure cited by CRN |
| Q3 2023 | $23.19 billion | About 13% | Zacks consensus estimate cited by CRN before the October 26 release |
The estimate was only a one-percentage-point improvement on Q2’s growth rate and less than half Q3 2022’s 27%. It therefore raised a narrow question: had the deceleration begun to stabilize, or would the reported figure show that AWS was still losing momentum? The estimate alone could not settle that question.
What would count as evidence that growth had stabilized?
A 13% result would have been consistent with a pause in the downward trend, but one quarter would not establish a durable recovery. The revenue figure and its year-over-year growth rate answer related but different questions: sales could rise in dollars while the percentage growth rate remains low because it is measured against the prior-year quarter.
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For investors reading the preview historically, the useful distinction is between a forecast and a reported outcome. The $23.19 billion and roughly 13% figures were pre-release consensus expectations; they should not be presented as AWS’s actual Q3 2023 results.
What was the AI question for AWS?
The preview’s central AI issue was not simply whether AWS had announced products or customer wins. It was whether adoption would become visible in revenue, profitability or stronger customer retention. CRN highlighted four parts of AWS’s offering:
Trainium and Inferentia
AWS positioned Trainium chips for model training and Inferentia chips for inference. Their business significance depended on whether customers used them to train and run models at scale, not just on the existence of the hardware.
Amazon Bedrock
Bedrock was presented as a way for customers to customize large language models and build generative-AI applications and agents. The preview’s open question was whether that activity would produce measurable commercial demand for AWS.
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CodeWhisperer was AWS’s AI-assisted coding product. Its potential value to AWS also depended on sustained customer use and the degree to which it supported broader AWS adoption.
Jassy’s stated pitch
Amazon CEO Andy Jassy described the product push this way, as quoted by CRN:
“AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases that make it much easier and more cost-effective for companies to train and run models (Trainium and Inferentia chips), customize Large Language Models to build generative AI applications and agents (Bedrock), and write code much more efficiently with CodeWhisperer.”
The quote sets out the intended customer benefits; it does not by itself quantify sales, margins or retention attributable to AI.
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CRN reported that Amazon had reportedly committed more than $1 billion over five years for more than one million Microsoft 365 licenses for corporate and frontline employees. That report was striking because Microsoft competes with AWS in cloud infrastructure, while Amazon also offers workplace products such as Chime and WorkDocs. A large Microsoft 365 commitment illustrates that a company can be both a competitor and a supplier; it does not, on its own, show that AWS customers were switching to Microsoft cloud services.
The other strategic overlap involved Anthropic. Amazon announced plans to invest up to $4 billion in the AI company. Anthropic committed to use AWS chips to build, train and deploy future foundation models and to co-innovate with Amazon. That made Anthropic a potential AWS AI partner even as it operated in a competitive landscape that included Microsoft-backed OpenAI and Google.
How large was AWS compared with other cloud providers?
For Q2 2023, Synergy Research Group figures cited by CRN put AWS first in global cloud infrastructure-services share, followed by Microsoft and Google Cloud:
| Provider | Global cloud infrastructure-services share, Q2 2023 |
|---|---|
| AWS | About 32% (Synergy Research Group figure cited by CRN) |
| Microsoft | About 22% (Synergy Research Group figure cited by CRN) |
| Google Cloud | About 11% (Synergy Research Group figure cited by CRN) |
Those share figures describe the market in Q2 2023; they are not AWS revenue growth rates or a measure of AI revenue.
Best Value
How should the earnings comparisons be read?
The provider figures available around the preview came from different reporting periods and segment definitions. They provide context, not a like-for-like ranking of cloud revenue:
| Company and reported measure | Period and figure cited by CRN | Important qualification |
|---|---|---|
| AWS sales | Q3 2023: $23.19 billion and about 13% year-over-year growth | Zacks consensus estimate before AWS’s October 26, 2023 report |
| Google Cloud revenue | Q3 2023: $8.4 billion, up 22% year over year | Reported revenue figure cited by CRN |
| Microsoft Intelligent Cloud sales | Calendar Q2 2023: $24.3 billion, up 19% year over year | Intelligent Cloud includes Azure together with server products and other cloud services; Microsoft does not report standalone Azure revenue in this figure |
In particular, comparing AWS’s separately reported segment sales directly with Microsoft Intelligent Cloud sales would overstate how comparable the measures are. The periods differ, and Microsoft’s figure covers a broader reporting unit.
What the preview could—and could not—show
The October 2023 preview framed three tests for AWS: whether sales growth was stabilizing, whether AI products and partnerships were translating into business results, and how Amazon’s competitive position sat alongside its strategic relationships. Its consensus estimate and market-share context helped frame those questions, but the preview’s AI product list and partnership announcements were not proof of AI-driven revenue or improved profitability.
For the original pre-release framing and its cited expectations, see CRN’s AWS Q3 earnings preview.
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