Amazon’s stock price had already been dropping in after-hours trading on Thursday despite better-than-expected results when Morgan Stanley analyst Brian Nowak prefaced his questions on an earnings call with a disclaimer that made it clear this wasn’t going to be a “Congrats on the quarter, guys” type of analyst-CEO interaction.

“I have two [questions] for you on AWS; they’re a little tough, but I’m going to throw them at you,” Nowak told Amazon CEO Andy Jassy. “There is a Wall Street finance person narrative right now that AWS is falling behind in gen AI with concerns about share loss to peers. What is your rebuttal to that, and talk to us about your and the team’s most important focal points, just to ensure that AWS stays on the knife’s edge of innovation versus hyperscaler peers.”

Nowak also pressed Jassy on why it wouldn’t be fair to assume that AWS revenue growth shouldn’t accelerate in the back half of the year given all of AWS’ generative AI offerings and widespread demand from companies of all sizes to cash in on this transformational technology.

Jassy responded by stressing that these are the early stages of a technological transformation that will extend far into the future. While some of the top frontier model providers do use AWS in some capacity, non-AI AWS customers that are rushing to build generative and agentic AI services using AWS are “quite early, and many of them are just smaller in terms of usage relative to some of those top-heavy applications I mentioned earlier.” That is bound to change.

So if you follow Jassy’s thinking, as more enterprises figure out what they want to build and how they want to build it, they’re going to start having different needs. For the largest model makers, like OpenAI or Anthropic, Jassy foresees their costs shifting from a mix between training their models and the cost associated with “inference,” or the customer-facing part where the model spits out a prediction, answer, or action, to mostly inference expenses. And Jassy maintains AWS is positioned well for this transition because of the low-cost AI chip line Trainium.

“It’s about 30% and 40% better price performance than the other GPU providers out there right now, and we’re already working on our third version,” he said.

For others, who want to use another company’s model to create their own generative AI applications, Jassy argued that Amazon Bedrock, which offers models from a wide selection of companies, has become a go-to destination, and “is growing very substantially.”

Jassy continued on the this-is-just-the-first-inning thread, by noting that companies are just starting to think about deploying AI agents and that, with its recent agentic AI announcements, AWS will be well positioned to capitalize.

The Amazon CEO, and former AWS chief, added that AWS’ cloud leadership position also provides some lock-in as AI “inference” becomes just another component of a company’s cloud services stack.

“People are going to actually want to run those [AI] applications close to where their other applications are running, where their data is,” Jassy said. “There’s just so many more applications and data running in AWS than anywhere else.”

As for Nowak’s question about the possibility of AWS’ growth rate accelerating in the back half of the year, Jassy wouldn’t directly answer it but stressed his optimism, in part stemming from AWS customers starting to deploy more AI products at scale that should continue to ramp up in coming quarters.

Earlier in the call, Jassy had defended AWS’ 18% revenue growth rate in light of Microsoft reporting 34% annual revenue growth for its Azure cloud unit and Alphabet recently reporting 32% quarterly growth for Google Cloud. Azure generates around two-thirds the revenue that AWS does, while Google Cloud registers less than half the annual revenue of Amazon’s cloud behemoth.

“You look at the business, it’s a $123 billion annual revenue run rate business, and it’s still early,” he said. “How often do you have an opportunity that’s $123 billion in annual revenue run rate where you say it’s still early? It’s a very unusual opportunity that we’re very bullish about.”

Are you a current or former AWS employee with thoughts on this topic or a tip to share? Contact Jason Del Rey at [email protected], [email protected], or through messaging apps Signal and WhatsApp at 917-655-4267. You can also contact him on LinkedIn or at @delrey on X, @jdelrey on Threads, and on Bluesky.

This story was originally featured on Fortune.com

© Michael Nagle—Bloomberg/Getty Images

Ebay turns 30 this September and the company is showing some signs that it’s starting to turn back the clock.

The auction giant’s stock surged more than 19% on Thursday to an all-time high of $92 a share on the back of revenue growth and earnings that both surpassed analyst expectations, and an outlook that was far less gloomy than it could have been.

That’s the top-line good news.

The reality check, though, is that Ebay still accounts for less than 4% of the overall e-commerce market in the U.S., compared to around 40% for Amazon, 6% for Walmart, and pressure from a collection of discount or product-specific apps and marketplaces from Temu to Whatnot, a live-streaming commerce startup valued at $5 billion.

So what gives? Where is the eBay optimism coming from and is this current moment an aberration and blip or, as the internet analyst Mark Mahaney wrote in a research note on Thursday, “something of an inflection point”?

As Mahaney wrote, eBay’s gross volume and revenue growth rates, excluding the impact of foreign exchange rate changes, both rose 4% year-over-year in the past quarter. Those numbers sound meager because they are, but it’s the fastest that the commerce marketplace has grown in two years—which is…something.

The one-time e-commerce darling has been trying to lean into its historic strengths or “focus areas”—product categories where it can win—and that seems to be paying off. Those categories grew 10% in the quarter compared to about 1% for everything else.

“Collectibles was once again the largest contributor to growth as year-over-year growth in trading cards GMV accelerated for the 10th straight quarter on the back of continued momentum in both collectible card games and sports trading cards,” CEO Jamie Iannone told analysts on the earnings call.

Collectible categories have been booming across the board since the onset of the pandemic, as nostalgia coupled with new shopping experiences and sales tactics drive renewed interest in trading cards like Pokemon as well as sports cards. Startups like Whatnot, Fanatics, and Courtyard, which is selling $50 million in cards and comics a month, are playing a role. But eBay is still the biggest online player in the space and also capitalizing on the consumer interest.

To that end, the company is pushing aggressively into live-streaming commerce, with eBay Live, where Fanatics and Whatnot are finding success, and the early signs are encouraging, according to Iannone.

“We have already seen significant evidence that live commerce can deepen engagement among eBay enthusiasts and unlock even greater velocity in our strongest verticals, which validates our continued investment in this experience,” he told analysts.

(For what it’s worth, top live-streaming card seller Rene Nezhoda, of Storage Wars fame, had this to say about eBay Live when I interviewed him about his business on Whatnot, where he sells $15 million to $18 million a year in sports cards. “I wouldn’t be surprised if eBay Live might become the market leader because they just have such a big user database,” he told Fortune in June.)

Ebay’s Iannone said his company is also seeing both top-line and bottom-line benefits from integrating the Klarna Buy Now Pay Later payment method into the shopping site, by expanding its on-site advertising business, and by integrating generative and agentic AI experiences into the shopping marketplace for both buyers or sellers, though it’s too early to tell how much the latter will boost the business long term.

No, eBay isn’t immune to the U.S.-China tariff war, though it shouldn’t be crippled by it. No, it’s not a threat to giants like Amazon and Walmart that specialize in everyday, new goods. But riding hot, historically strong product categories, while keeping up with new industry tablestakes like Gen AI integrations for sellers and buyers, and popular payment types like Klarna, has the 30-year-old company’s future looking brighter than it has in a long while. And that’s not nothing.

This story was originally featured on Fortune.com

© Sara Stathas/Bloomberg--Getty Images