Amazon Soars on Q3 2025 Results as AWS Accelerates Cloud Growth
Amazon Soars on Q3 2025 Results as AWS Accelerates Cloud Growth ☁️
Amazon (US.AMZN) shares jumped in after-hours trading as Q3 2025 results beat expectations, powered by an acceleration in AWS. The quarter reinforced the view that Amazon’s next growth chapter will be driven by AI and cloud infrastructure.
🚀 Headline Results: Better Than Expected
- Revenue: $180.17B (+13% YoY), above analyst estimates (~$175.33B)
- Net income: $21.19B (+38% YoY)
- Adjusted EPS: $1.95 (+36% YoY; vs. $1.57 expected)
- Operating income: $17.4B (flat YoY; includes $4.3B special costs)
- After-hours move: +10% (intraday commentary cited up to +13%)
- Expected move: ±5.9%
Context: Strength was broad, with cloud and advertising outpacing expectations while core retail rebounded into peak seasonality.
📦 Segment Performance
- 🛒 Online retail: +10% YoY, helped by July Prime Day
- ☁️ AWS: $33B revenue (+20% YoY; est. $32.42B) · Operating profit $11.4B (+9% YoY) · ~two-thirds of Amazon’s total operating profit
- 📢 Advertising: $17.7B (+22% YoY; est. $17.34B)
🧭 Guidance & Key Messages
Q4 2025 outlook:
- Revenue: $206–213B (midpoint $209.5B; +10–13% YoY)
- Operating income: $21–26B (vs. $23.8B expected; $21.2B in Q4 2024)
CapEx 2025: raised to $125B (from $118B), with further increases likely in 2026 for data centers and AI capacity.
Trade & tariffs: Amazon reports stable marketplace pricing despite tariff noise, suggesting third-party sellers are absorbing part of the cost pressures.
Restructuring: ~14,000 corporate roles reduced to streamline operations; management says the move is cultural/operational, not purely financial.
🗣️ CEO Andy Jassy on AI, Chips, and Capacity
“AWS is growing at a pace we haven’t seen since 2022,” said CEO Andy Jassy, citing strong demand for both AI services and core cloud infrastructure. Amazon added 3.8 GW of capacity over the last 12 months and expects to double capacity by 2027.
On silicon strategy, Amazon continues to offer choice (including NVIDIA) while promoting its own Trainium accelerators, which management claims deliver 30–40% better price-performance. Trainium3 is expected to be ~40% faster than Trainium2 and is a priority for rapid, large-scale deployment.
💡 Opportunities
- Project Rainier: $11B AI data center built for Anthropic (Claude) signals deepening strategic ties with leading model providers.
- AI product stack: Q (enterprise assistant), Bedrock (gen-AI platform), and Rufus (shopping assistant used by 250M customers; boosts completion likelihood by ~60%).
- Seasonal tailwinds: October’s “Prime Big Deal Days” provided momentum into the holiday quarter.
⚠️ Risks to Watch
- Power availability: “Energy might be the main constraint,” Jassy said; chip supply could become a bottleneck later.
- Reliability: A significant AWS US-EAST-1 outage on Oct 20, 2025 affected hundreds of services, spotlighting uptime and incident costs.
- Competition: AWS’s rebound is clear, but growth still trails Microsoft and Alphabet in some estimates — execution and cost leadership remain critical.
📈 Bottom Line
Amazon is firmly back in growth mode. AWS is re-accelerating, advertising is expanding, and retail is resilient heading into peak season. The balancing act: fund massive AI and cloud build-outs while protecting margins and reliability. For investors, the thesis centers on cloud + AI scale driving multi-year operating leverage.
