’s Cloud Computing Unit ‘Holding Up Nicely’ With Growth, Canaccord Says (AMZN) reported a 55% increase in revenue for its cloud computing segment, where growth and profitability are “holding up nicely,” according to Canaccord Genuity technology analyst Michael Graham.

Amazon Web Services net sales climbed to $3.23 billion in the three months ended Sept. 30, from $2.09 billion a year earlier, the company said in a statement late Thursday. Consolidated sales for the wider retail giant increased 29% to $32.71 billion, just ahead of the average of estimates on Capital IQ for $32.67 billion.

While investors punished Amazon’s stock in Friday’s trading, Graham said the quarterly results “were generally strong,” according to an e-mailed note. He raised his price target on the shares for the firm, which has a market capitalization of $366.4 billion, to $900 from $825.

“We see no abatement in Amazon’s operating strength,” he said. “With the core eCommerce business performing well and AWS growth and profitability holding up nicely, we continue to stand by our investment thesis,” which is centered on share gains in online retail, expansion in web services, the “ability to incubate large new businesses like AWS and (likely) logistics” and a “more forgiving investor sentiment around temporary margin setbacks,” Graham said.

Amazon’s earnings per diluted share jumped to $0.52 from $0.17 in the prior-year period, but that was below the consensus estimate of analysts polled by Capital IQ, which had forecast $0.81.

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