Amazon Forecasts 12% Revenue Growth in ’25, But Faces Over 30,000 Job Cuts
Analysts project Amazon’s Q4 ’25 revenue at $211.3 billion and EPS at $1.97, driving full-year ’25 revenue growth of 12% and EPS growth of 29%, with 2026 EPS forecast at $8.00 (12% growth). Amazon has cut over 30,000 positions since October, including 16,000 corporate layoffs and 5,000 retail job cuts.
1. Amazon Earnings Preview Highlights Robust Growth
Analysts forecast that Amazon’s fourth-quarter fiscal 2025 results, due Thursday night, will show revenue of $211.3 billion and earnings per share of $1.97—year-over-year increases of roughly 13 percent in sales and 6 percent in EPS. If met, full-year 2025 results would reflect 12 percent revenue growth and 29 percent EPS growth, underscoring the company’s continued expansion despite macroeconomic headwinds. Investor attention is focused on whether AWS can sustain its growth trajectory, given rising capital intensity in AI infrastructure.
2. AWS Operating Margin Under Pressure from Tough Compares
Amazon Web Services faces challenging year-over-year operating margin comparisons in the December ’25 and March ’26 quarters, driven by significant capacity additions to support AI workloads—more than one gigawatt of new data-center power in Q4 alone. While AWS revenue growth remains near 20 percent, analysts caution that high depreciation and amortization on recent investments will weigh on margins, and consensus forecasts suggest only mid-teens percentage EPS growth for calendar 2026, tempered by cautious guidance from major brokerages.
3. AI Infrastructure Spending and Funding Gap Pose Strategic Risks
The hyperscalers’ race to build ever-larger AI compute clusters has escalated Amazon’s capital expenditures substantially, mirroring industrywide trends that include a reported $38 billion cloud services agreement with OpenAI. However, research estimates indicate a potential $1.4 trillion global funding shortfall for AI infrastructure over the next decade. Investors are weighing whether Amazon’s massive investment pace will translate into durable competitive advantage or risk overextension if monetization lags.
4. Monetization Challenges and AI Hype Temper Investor Optimism
Despite surging adoption of generative AI tools, only about 3 percent of enterprise users currently pay for premium AI services—raising questions about the pace at which AWS and Amazon’s advertising arm can capture incremental revenue. Historical comparisons to past technology waves suggest that some of AI’s touted economic benefits may be overstated, prompting analysts to debate whether market multiples—seen at roughly 34 times forward EPS and 20 times cash flow—adequately price in both the upside and the risk of an AI-driven valuation premium unwinding.