Amazon Web Services (AWS) continues to rack up the sales. In the third quarter, the division reported revenue of $4.6 billion, a 42 percent increase over the same period in 2016. In addition, with first-quarter revenues of $3.66 billion and second quarter revenues of $4.10 billion, the company is now on track to top $18 billion in revenue for the year.

AWS also reported an operating income of $1.17 billion.

Overall, the e-commerce giant posted third-quarter sales of $43.7 billion, which is a 34 percent increase over the same quarter in the previous year. Amazon also noted $1.3 billion of those sales came from Whole Foods, which it acquired in August.

Investors reacted favorably the company's earnings report. Amazon's stock was trading up 12.5 percent at mid-day to $1,094 per share.

During the quarterly call with investors, Amazon CFO Brian Olsavsky said that AWS is attracting a lot of new customers, and existing customers are adding more workloads to the cloud. “The usage growth is actually growing a lot higher than revenue growth,” he noted.

Olsavsky also hinted that the company is expecting a strong fourth quarter in its AWS business and may have some announcements at its annual Re:Invent conference in early December.

AWS did make some interesting announcements during the third quarter. In particular, the availability of VMware Cloud on AWS, which combines VMware’s software-defined data center with the AWS Cloud so customers can run applications across both. At VMWorld earlier this year, VMware said that early access and beta customers include Accenture, Sysco, Adidas, Medtronic, Brink’s, Cerner, Elemica, MIT, Moody’s, the state of Louisiana, and Sysco.

AWS also said that it will open a new infrastructure region in the Middle East in 2019. Currently, the company provides 44 availability zones across 16 infrastructure regions globally.

Although AWS is considered the top public cloud provider, the company is facing increasing competition from Microsoft, which reported its earnings yesterday as well. Microsoft reported that its Azure revenue grew 90 percent in its first fiscal quarter.