Investors cheer as Amazon’s Q3 earnings crush expectations and AWS rebounds, just days after the tech giant announced plans to axe tens of thousands of corporate jobs.

Wall Street Loves a Good Firing

It’s the kind of timing only Big Tech can pull off. Days after Amazon announced plans to begin cutting up to 30,000 corporate jobs, its stock surged 13% in after-hours trading on Thursday as investors celebrated a blowout third quarter. Cost-cutting, it seems, is the new innovation.

The company reported earnings per share of $1.95 on revenue of $180.2 billion, beating Wall Street estimates of $1.58 and $177.8 billion respectively. Its cloud arm, Amazon Web Services (AWS), hauled in $33 billion in revenue—up 20% year-on-year and its fastest growth since 2022.

CEO Andy Jassy sounded predictably bullish: “We continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business.” Translation: the robots are coming, and they’re good for margins.

AI Dreams and Power Nightmares

Jassy didn’t stop there. He told investors Amazon has added 3.8 gigawatts of capacity over the past year and plans to double that by 2027. Power, not chips, appears to be the main bottleneck, though that may soon shift. In the meantime, Amazon is still snapping up Nvidia’s finest silicon while touting its homegrown Trainium2 chips, which are now part of a “multibillion-dollar business” growing 150% quarter over quarter.

Amazon even unveiled Project Rainier, a massive AI cluster featuring 500,000 of those chips. It’s a flex aimed squarely at Microsoft and Google, whose AI-cloud empires have made Amazon look sluggish. The company also confirmed AI startup Anthropic has signed on to use one million custom Amazon chips to train and run its models, though Anthropic announced a similar deal with Google just last week.

In other words: Amazon is in the AI race, just not leading it. Yet.

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From Rufus to Rainier: The Great AI Pivot

If AI is the future, Amazon wants a piece of every corner. The company’s new AI shopping assistant, Rufus, has reached 250 million users this year, and those users are 60% more likely to make a purchase, according to Amazon. Meanwhile, its “Help Me Decide” feature is quietly monetizing indecision, offering algorithmic guidance for the consumer who can’t choose between air fryers.

Jassy insists Amazon is monetising as fast as they’re bringing in capacity, and analysts seem convinced. Advertising revenue hit $17.7 billion, narrowly topping expectations, while retail sales rose 10%—helped by July’s Prime Day feeding frenzy.

A Tale of Two Headlines

But let’s rewind. Just before this euphoria, Amazon announced plans to axe up to 30,000 corporate staff, the largest such layoff in its history. With Wall Street applauding the “leaner” Amazon, it looks like a grim masterclass in timing.

Still, investors don’t seem bothered by the human cost. The $1.8 billion in severance and $2.5 billion FTC settlement baked into this quarter’s results barely dented enthusiasm. Amazon’s capital expenditure forecast now sits at $125 billion for 2025—up from $118 billion earlier this year, with plans to spend even more in 2026.

Lean, Mean, and Lovin’ It

The results were so strong they lifted broader markets. Futures tied to the S&P 500 rose 0.5%, while Nasdaq 100 futures gained 1%. Apple, which posted its own upbeat quarter, rose 3% after-hours.

For the next quarter, Amazon is projecting sales between $206 billion and $213 billion, implying growth of up to 13%. Operating income is forecast between $21 billion and $26 billion, numbers that would make even the most hardened cost-cutter blush.

Wall Street, of course, rewarded it all with enthusiasm usually reserved for moon landings or AI breakthroughs. The message is clear: lay off tens of thousands, beat your numbers, and your stock soars.

The Bottom Line

Amazon has successfully convinced the market that ruthless efficiency equals visionary leadership. Whether that holds when the next quarter rolls around, and as the pink slips settle, is another story. For now, investors are high on AWS acceleration, AI optimism, and the faint smell of redundancy in the air.