Amazon jumps as AWS growth soothes fears over rising AI spending

July 31 (Reuters) - Amazon AMZN.O shares jumped more than 12% before the bell on Friday after the e-commerce and cloud giant posted its strongest cloud growth in over four years, bolstering investor confidence that its multibillion-dollar AI bets are driving a fresh wave of demand.

The rally put Amazon on track to add about $300 billion in market value, as investors looked past a 10% increase in planned capital expenditure to $220 billion and instead focused on booming demand at Amazon Web Services (AWS), the profit engine at the center of the company's AI push.

Revenue at Amazon Web Services, the cloud computing unit, jumped 37% to $42.2 billion in the second quarter ended June 30, handily beating analysts' consensus estimate of a 31.21% increase, according to data compiled by LSEG.

Amazon CEO Andy Jassy said demand remained so strong that the company's computing capacity proved insufficient to serve customers despite raising its capital spending.

At least five brokerages raised their price targets on the stock following results.