Third quarter results exceeded expectations at Amazon, and the company expects a strong fourth quarter, forecasting that total sales will rise between 7% and 11% over last year’s final period to as much as $188.5 billion. Operating income is expected to jump by 21% to 51% over last year. In a conference call discussing results, executives said that customers have become more price conscious, and are using Amazon to buy cheaper household items.

In the third quarter, total revenue rose 11%, to $158.9 billion, and operating income soared 55%, to $17.4 billion. As has become the typical pattern, Amazon’s cloud services group, AWS, drove the profit boom, with operating income jumping 48% and accounted for $10.4 billion of Amazon’s $17.4 billion in quarterly operating income. Sales at online stores rose 8% in the third quarter, to $61.4 billion, and the segment continues to be Amazon’s biggest revenue stream.

In prepared remarks, a publishing-related business did receive a shoutout from CEO Andy Jassy. “We kicked off the holiday season with our biggest-ever Prime Big Deal Days and the launch of an all-new Kindle lineup that is significantly outperforming our expectations,” Jassy said in a statement. In October, Amazon released a number of Kindle devices, including the first Kindle with a color display.

The majority of Amazon’s quarterly announcement, however, had to do with events surrounding generative AI. In a conference call with analysts, Jassy said Amazon would spend $75 billion on capital expenditures this year, largely to build data centers to support its AI projects. Expenditures are expected to exceed $75 billion in 2025.

"The faster we grow demand, the faster we have to invest capital in data centers, network gear and hardware,” Jassy said. 'We invest in all that upfront in advance of when we can monetize it. "

Despite the huge capital outlays, analysts clearly responded positively to what Amazon reported, with its stock price up about 10% as of Friday morning.