Amazon’s latest quarterly earnings report could answer one of Wall Street’s biggest questions: Is the company cutting jobs because growth is stalling, or is the retail giant’s big bet on AI making it more efficient?
First scenario: The company announced 14,000 layoffs earlier this week because it’s worried about its performance and wants to cut costs.
Second scenario: The tech giant has become so great at artificial intelligence that its operations are becoming way more efficient, and it doesn’t need as many employees now.
The results, and a conference call with analysts, should shed light on this. Of course, the reality could be a combination of these two scenarios or something entirely different.
When Amazon reports, there’s also one particular number to watch: revenue growth for Amazon Web Services, the company’s all-important cloud business.
For the third quarter, Wall Street expects AWS revenue to reach $32.4 billion, representing an 18% year-over-year increase, according to RBC Capital.
Microsoft reported on Wednesday that Azure and other cloud services revenue increased 40%, and Google Cloud grew 34%. Google executives revealed on the company’s Wednesday earnings call that Google Cloud has signed more billion-dollar deals in the first nine months of 2025 than in the past two years combined. These numbers are not always strictly comparable with AWS, but that’s still very fast growth to compete with.
If AWS growth exceeds expectations, that will likely be a relief for investors and could hint that scenario 2 is in play: AI transformation is taking hold, both for Amazon and its cloud customers.
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If AWS revenue misses that 18% growth number, then Wall Street will probably worry more, and the first scenario could kick in: Those job cuts could be a defensive move.
Some analysts have been worried about AWS’s lagging growth rate for at least a year. The company was a pioneer in the cloud, but AI is changing the market and giving rivals a new way to compete.
Still, AWS remains the dominant player here, and it has promising opportunities, including a successful partnership with AI lab Anthropic.
AWS CEO Matt Garman told CNBC on Wednesday that the company feels “quite good” about its massive AI investments.
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