• Amazon shares jumped during premarket trading Friday after the company released third-quarter earnings that handedly beat analysts' estimates.
• CEO Andy Jassy has been in cost-cutting mode over the past year.
• Amazon reported an operating margin of 7.8%, the highest since it reached a record of 8.2% in the first quarter of 2021.

Shares of Amazon closed up more than 6% Friday after the company released third-quarter earnings that beat analysts' estimates and showed the company's cost-cutting efforts are working.

Amazon's revenue rose 13% to $143.1 billion in the third quarter. The company's net income more than tripled to $9.9 billion, or 94 cents a share, from $2.9 billion, or 28 cents a share, a year earlier. Amazon's earnings of 94 cents per share far exceeded the 58 cents expected by Wall Street.

CEO Andy Jassy has been in cost-cutting mode to address high levels of inflation and rising interest rates over the past year. Amazon carried out the largest layoffs in its history, cutting 27,000 jobs since last fall. The company also froze corporate hiring, and Jassy has looked to trim expenses in units across the company.

Amazon reported an operating margin of 7.8%, the highest since it reached a record of 8.2% in the first quarter of 2021. The company's operating margin for the third quarter marks a significant increase over the 2% margin it reported a year ago.

"We remain positive on AMZN supported by continued improvements in the margin profile, with visibility into an AWS acceleration and clear LT AI tailwinds that will impact the model over time," Jefferies analysts said in a note to investors Friday.

Blair analysts said Amazon "handily" beat expectations for the quarter and saw real improvement in operating income growth. They added that the company is "taking back control of the generative AI narrative," and that they saw positive signs around AWS' growth rate.

"We believe shares offer defensive positioning in a worsening market at compelling value considering the longer-term growth and earnings power of the model, with still embedded optionality in the form of grocery, healthcare, and satellite technology," they wrote Friday.

At Goldman Sachs, analysts said though there are some questions that remain about AWS' reacceleration and the nature of the global consumer, they considered the company's third-quarter report a "beat across the board."

They added that Amazon's risk versus reward remains "skewed heavily in a positive direction."

"Looking over a multi-year timeframe, we reiterate our view that Amazon will compound a mix of solid revenue trajectory with expanding margins as they deliver yield/returns on multiple-year investment cycles," they wrote in a Friday note.

— CNBC's Michael Bloom and Annie Palmer contributed to this report.

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