(Noah Berger/Getty Images)

Amazon pulled off its monster quarter despite being left out of OpenAI’s tangle of deals

Amazon’s AWS revenue grew 20% year on year, and will hit $125 billion in capex for the year. CEO Andy Jassy said the 14,000 jobs cut weren’t about money, but about “culture.”

Jon Keegan

10/31/25 11:24AM

Amazon may not be found in the tangled web of massive deals that are passing billions between OpenAI, Nvidia, Advanced Micro Devices, SoftBank, and Oracle, but that doesn’t mean it isn’t making bank from the AI race.

Last night, Amazon reported strong third-quarter earnings, beating Wall Street’s expectations on earnings and revenue. Shares were up over 10% in early trading this morning, and the stock opened at a record high of $250.10.

All eyes were on Amazon’s AWS cloud computing unit, which saw revenues grow 20% year on year, ringing up $33 billion in sales, just above analyst estimates. Demand for AWS computing was huge, and a backlog of contracted business is piling up.

On the earnings call, Amazon CEO Andy Jassy said:

“Backlog grew to $200 billion by Q3 quarter end, and doesn’t include several unannounced new deals in October, which together are more than our total deal volume for all of Q3. AWS is gaining momentum.”

It’s not clear what those unannounced deals are, but that is a significant amount of demand. This isn’t just an Amazon problem — Microsoft CEO Satya Nadella said they also had a huge backlog, but theirs was $392 billion.

The answer to this problem of course is spending buckets of capital expenditure dollars to scale up to meet demand. Amazon spent $35.1 billion on capex last quarter, and said the total for the full year is $125 billion. And next year, management expects it to be bigger than that.

Jassy was asked to talk about the massive layoffs Amazon just announced, cutting 14,000 corporate roles (with a reported 30,000 planned company-wide). Why did the company have to cut so deep when the money is rolling in? It’s not about the money, said Jassy:

“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. It really, it’s culture. And if you grow as fast as we did for several years, the size of businesses, the number of people, the number of locations, the types of businesses you’re in, you end up with a lot more people than what you had before, and you end up with a lot more layers.”

Jassy explained that all that built-up headcount was slowing management decisions down, and that the company is “committed to operating like the world’s largest startup.”

Update (Friday 11:45 a.m.): Corrected opening price for Amazon.

Matt Phillips7h

Oil settles Friday at highest level since start of war

US oil prices moved higher in afternoon trading Friday, sapping strength from the stock market as they posted their highest close since the start of the Iran war.

After another day where the Strait of Hormuz was essentially closed to global tanker traffic, US futures for West Texas Intermediate settled up 3.1% at $98.71 a barrel for an 8.6% weekly gain, per Dow Jones data.

American officials have discussed using the US Navy to escort tankers through the narrow waterway between Iran and Oman, but have said plans for such convoys are not ready yet. However, it is unclear if military convoys would bring an end to the war-related dislocations in the oil market.

“It could help,” Tom Liles, senior vice president of upstream research at energy consulting firm Rystad, told Sherwood News in a recent interview. “It could also go in a lot of different directions if a Navy ship is hit or if a tanker is hit.”

Oil Posts Weekly Gains As Middle East Conflict Drags On

Tasha Matsumoto

Stocks post third straight week of losses as Brent crude surges above $100

Stocks wiped out early gains to close lower amid the ongoing war in Iran.

Matt Phillips11h

Memory stocks rebound off last weeks losses

Memory stocks Micron, Sandisk, Western Digital, and Seagate Technology Holdings rose again Friday, putting these crucial providers of chips for AI inference work on track for big weekly gains after last week’s steep losses following the outbreak of war with Iran.

There’s no obvious trigger for the move higher for these shares this week, other than a bit of a recovery in the AI trade more broadly — AI beneficiaries like IT cable and connections maker Amphenol and custom chip and networking company Marvell Technology clawed back some gains this week — perhaps due Oracle’s earnings earlier, and some mean reversion to boot.

Micron is due to report earnings after the close of trading on Wednesday, with the company catching a couple price target hikes this week, including one from Wedbush on Friday.

Sandisk is something of a different story, as its enormous gains over the last 12 months — roughly 1,200% — have made it a momentum play beloved by the retail crowd.

It was up about 20% this week at around 11 a.m. ET. And its nearly 170% gain this year keeps the stock on top of the S&P 500, in terms of price performance.

Luke Kawa

11h

The S&P 500’s internals are awful... while it’s still less than 5% from its record closing high

The breadth of negative momentum within the index’s constituents is even worse than at the tariff-induced market bottom in April 2025.