This article first appeared on GuruFocus.

Amazon (NASDAQ:AMZN) shares surged more than 13% on early Friday after the company delivered stronger-than-expected third-quarter results, driven by ongoing growth in its cloud and advertising businesses.

• Warning! GuruFocus has detected 3 Warning Sign with AMZN.

• Is AMZN fairly valued? Test your thesis with our free DCF calculator.

Net income rose 36% year over year to $1.95 per share, topping forecasts. Total revenue increased 12% to $180.2 billion, helped by gains across online and physical retail, subscription services and continued momentum in Amazon Web Services.

AWS revenue climbed 20% from a year earlier to $33.01 billion, as customers continued spending on AI-related workloads. Advertising services also remained a key growth driver, generating $17.7 billion in the quarter, ahead of market expectations.

Retail operations also showed steady improvement. Online store sales advanced nearly 10% to $67.41 billion, and third-party seller services rose 12% to $42.5 billion. In North America, revenue increased 11% to $106.27 billion, while international sales gained 14%.

Operating income held around $17.4 billion, roughly flat from last year and below analyst estimates. Profit margins narrowed due to higher spending, including investments in fulfillment and data-center infrastructure.

Analysts said the quarter indicates Amazon’s AI and cloud strategy continues to support growth, though elevated capital expenditures could weigh on near-term profitability.