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Amazon‘s successful results hinging on cloud business

(FinancialPress) — Amazon‘s (AMZN) cloud business has become its pot of gold at the end of the rainbow.

Amazon Web Services— the company unit dedicated to cloud computing — has raked in a large fraction of the company‘s overall earnings for most of the last two years. But even beyond that, in three of the last five quarters Amazon has posted, it has managed to blanket the loss that its sister units have incurred in, thus turning a likely period of loss into one of profit.

The recently-released 2017 third quarter report comes as reference. AWS posted a $1.2 billion operating profit, which was enough to clean the slate of the $936 million operating loss that Amazon’s international e-commerce business recorded.

AWS the current leader in the cloud computing market, with $4.6 billion in revenue reported for the third quarter, and is poised to reach $18 billion in total revenues for 2017. 2016‘s Q3 performance penned a $3.2 billion revenue for the unit.

This success has helped relieve pressure from Jeff Bezos, the company’s CEO, as Bezos has a trademark tendency to have Amazon’s businesses running at close-to-break-even points in order to conquer market share. The strategy, while risky, has proven accurate: after their Q3 report was released, the company’s stock skyrocketed.

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