Traders cheer as Amazon’s Q3 earnings crush expectations and AWS
rebounds, simply days after the tech big introduced plans to axe tens of
hundreds of company jobs.
Wall Road Loves a Good Firing
It’s the form of timing solely Massive Tech can pull off. Days after Amazon introduced
plans to start chopping as much as 30,000 company jobs, its
inventory surged 13% in after-hours buying and selling on Thursday as buyers celebrated
a blowout third quarter. Value-cutting, it appears, is the brand new innovation.
Don’t doubt this man once more$AMZN pic.twitter.com/Zlm33ovRkR
— The Lengthy Investor (@TheLongInvest) October 30, 2025
The
firm reported earnings per share of $1.95 on income of $180.2 billion, beating
Wall Road estimates of $1.58 and $177.8 billion respectively. Its cloud arm, Amazon
Internet Companies (AWS), hauled in $33 billion in income—up
20% year-on-year and its quickest progress since 2022.
CEO Andy Jassy sounded
predictably bullish: “We proceed to see robust momentum and progress throughout
Amazon as AI drives significant enhancements in each nook of our enterprise.”
Translation: the robots are coming, and so they’re good for margins.
AI Goals and Energy Nightmares
Jassy didn’t cease there. He informed buyers Amazon has added 3.8
gigawatts of capability over the previous 12 months and plans to double that by 2027. Energy,
not chips, seems to be the principle bottleneck, although which will quickly shift. In
the meantime, Amazon continues to be snapping up Nvidia’s best silicon whereas touting
its homegrown Trainium2 chips, which are actually a part of a “multibillion-dollar
enterprise” rising 150% quarter over quarter.
Amazon shedding 30,000 individuals after which beating on earnings a lot that the inventory gained $250 billion {dollars} in 1 minute is all you must find out about what AI goes to do to society. pic.twitter.com/Js5JVoBoDu
— Spencer Hakimian (@SpencerHakimian) October 30, 2025
Amazon even unveiled Challenge Rainier, an enormous AI cluster that includes
500,000 of these chips. It’s a flex aimed squarely at Microsoft and Google,
whose AI-cloud empires have made Amazon look sluggish. The corporate additionally
confirmed AI startup Anthropic has signed on to make use of a million customized Amazon
chips to coach and run its fashions, although Anthropic
introduced the same cope with Google simply final week.
In different phrases: Amazon is within the AI race, simply not main it. But.
[#highlighted-links#]
From Rufus to Rainier: The Nice AI Pivot
If AI is the long run, Amazon needs a chunk of each nook. The
firm’s new AI purchasing assistant, Rufus, has reached 250 million customers this
12 months, and people customers are 60% extra prone to make a purchase order, in accordance with
Amazon. In the meantime, its “Assist Me Resolve” function is quietly monetizing
indecision, providing algorithmic steering for the buyer who can’t select
between air fryers.
Amazon didn’t simply lower 14,000 jobs. It lower latency.The headlines name it an AI layoff. However this isn’t about expertise. It’s about throughput.Wall Road needs leverage. AI offers management a brand new language for delivering it:Fewer people between sign and decisionFewer… pic.twitter.com/WQ1CEgaxby
— David Elkington (@DaveElkington) October 28, 2025
Jassy insists Amazon is monetising as quick as they’re bringing in
capability, and analysts appear satisfied. Promoting
income hit $17.7 billion, narrowly topping expectations, whereas retail
gross sales rose 10%—helped by July’s Prime Day feeding frenzy.
A Story of Two Headlines
However let’s rewind. Simply earlier than this euphoria, Amazon
introduced plans to axe as much as 30,000 company workers, the biggest such
layoff in its historical past. With Wall Road applauding the “leaner” Amazon, it
appears to be like like a grim masterclass in timing.
Nonetheless, buyers don’t appear bothered by the human price. The $1.8
billion in severance and $2.5 billion FTC settlement baked into this quarter’s
outcomes barely dented enthusiasm. Amazon’s capital expenditure forecast now
sits at $125 billion for 2025—up from $118 billion earlier this 12 months, with
plans to spend much more in 2026.
Lean, Imply, and Lovin’ It
The outcomes had been so robust they lifted broader markets. Futures tied to
the S&P
500 rose 0.5%, whereas Nasdaq 100 futures gained 1%. Apple, which posted its
personal upbeat quarter, rose 3% after-hours.
For the following quarter, Amazon
is projecting gross sales between $206 billion and $213 billion, implying progress
of as much as 13%. Working revenue is forecast between $21 billion and $26 billion,
numbers that will make even essentially the most hardened cost-cutter blush.
Wall Road, in fact, rewarded all of it with enthusiasm normally
reserved for moon landings or AI breakthroughs. The message is evident: lay off
tens of hundreds, beat your numbers, and your inventory soars.
The Backside Line
Amazon has efficiently satisfied the market that ruthless effectivity
equals visionary management. Whether or not that holds when the following quarter rolls
round, and because the pink slips settle, is one other story. For now, buyers are
excessive on AWS acceleration, AI optimism, and the faint scent of redundancy within the
air.
This text was written by Louis Parks at www.financemagnates.com.
Source link
