Key Points:
- Analysts expect $211 billion in revenue for the fourth quarter.
- Cloud growth is projected to hit nearly 22 percent.
- The company cut 16,000 jobs to streamline operations.
- Amazon is deepening ties with OpenAI and Anthropic.
Amazon is ready to release its fourth-quarter earnings report on Thursday after the market closes. Wall Street is watching closely. Analysts expect the tech giant to report revenue of $211.33 billion and earnings of $1.97 per share. The biggest attention grabber will likely be Amazon Web Services (AWS). Investors hope this cloud division will show a growth rate of 21.4%, continuing its upward trend from previous quarters.
The report comes as Amazon spends massive amounts of money to win the artificial intelligence race. In the third quarter, the company said it was on track to spend $125 billion in capital expenditures in 2025, with that number likely going up this year.
To support this, they recently opened an $11 billion data center called Project Rainier, built specifically to run AI models for Anthropic.
To fund this expensive shift, Amazon is cutting costs aggressively elsewhere. Just last week, the company announced it would lay off about 16,000 corporate employees. This follows another round of 14,000 cuts from October. CEO Andy Jassy says these hard choices are necessary to reduce bureaucracy and help the company move faster, operating like the “world’s largest startup.”
Amazon is also strengthening its relationship with OpenAI, the creator of ChatGPT. OpenAI agreed to buy $38 billion in cloud services from Amazon over the next seven years. Reports suggest the two companies are discussing an even deeper partnership, where Amazon might invest up to $50 billion in the startup or use OpenAI’s models to power a new version of Alexa.
Despite these aggressive moves, Amazon faces pressure to prove it isn’t falling behind. Deutsche Bank analysts recently called the company an “AI laggard” compared to other major tech firms. However, they believe a strong earnings report could help change that perception.
Beyond tech, Amazon is also reworking its retail strategy. The company closed its Fresh and Go grocery chains in the fourth quarter and plans to convert some locations into Whole Foods stores.
