Amazon Beats Street View in Q3 Earnings; Raises CapEx Projections to $125 Bn

Amazon’s revenue for the quarter ended September stood at $180 billion, in contrast to $177.8 billion estimated by analysts, according to analysts polled by LSEG. The company’s earnings per share were $1.95 against analysts’ forecast of $1.57. Amazon Web Services generated $33 billion in revenue — the biggest year-on-year rise in three years — while revenue from advertising was $17.7 billion.

Amazon’s cloud unit revenue rose 20.2% in July–September, exceeding analysts’ projections of 18.1%. The cloud unit posted the strongest growth rate in nearly three years, giving investors a sigh of relief as the stock had been lagging behind its industry peers this year.

“Cloud growth has been a key area of concern for the company, as it faces intensifying pressure from rivals Google and Microsoft,” a CNBC report said. Google’s cloud revenue rose 34% on the quarter, while Microsoft Azure posted growth of 40%.

“We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity — adding more than 3.8 gigawatts in the past 12 months,” Amazon Chief Executive Officer Andy Jassy said.

Better CapEx Outlook

Amazon increased its projections for capital expenditure to $125 billion from an earlier forecast of $118 billion for the year. Chief Financial Officer Brian Olsavsky said the number is expected to further increase in 2026. For the ongoing quarter, the company expects sales to rise to $213 billion from $206 billion. Operating income is seen ranging between $21 billion and $26 billion, as against analysts’ projection of $23.8 billion.

AI Investment Bubble

Artificial Intelligence (AI) has become one of the key arenas of investment across Amazon, further reinforcing the ongoing AI bubble seen across industries. AI has been integrated into the company’s retail, cloud, devices, and ads businesses. Amazon on Wednesday started its AI data centre, Project Rainier, built exclusively to run models from Claude chatbot creator Anthropic.

According to media reports, while Amazon remains the industry leader for cloud infrastructure technology, it faces a public perception that it is missing out on a “flurry of highly lucrative AI deals” for cloud services.

Layoff Clarity Amid Chaos

Jassy clarified during the quarterly earnings call that the recent layoff — one of the largest workforce reductions in Amazon’s history — was not driven by profiteering or AI replacing labour.

“The announcement that we made a few days ago was not really financially driven, and it’s not even really AI-driven — not right now, at least. Really, it’s culture,” Jassy said. According to a report by India Today, Jassy’s remarks unfold the move as a broader mission to make the company more flexible and less bureaucratic.

“The company’s corporate headcount, which tripled between 2017 and 2022, ballooned during its pandemic-fuelled expansion. That growth, Jassy now admits, has come at a cost,” the report said. Amazon announced the elimination of about 14,000 roles globally as part of its restructuring efforts and has started notifying employees affected by it.

Amazon India is likely to see layoffs of between 800 and 1,000 corporate employees, The New Indian Express reported. The company’s layoff announcement is seen as impacting corporate and support functions — essentially affecting white-collar roles rather than logistics or retail operations.

“Sources said the affected employees will receive full pay and benefits for a limited period, likely around 90 days, along with severance packages and the option to seek redeployment within the company,” The New Indian Express report said.

Amazon’s results suggest that its AI-driven cloud strategy is beginning to pay off, even as the company undergoes one of its most significant cultural and structural resets in years.