TLDR
- Amazon delivers Q4 2025 earnings report Thursday with Wall Street expecting $211.4 billion revenue
- Amazon Web Services posted $33 billion in Q3 revenue, surpassing $32.5 billion analyst estimates
- UBS maintains Buy rating with $311 price target, citing AWS capacity doubling plans through 2027
- Firm increases CapEx forecast to $344 billion through 2027, with AWS accounting for $260 billion
- Amazon eliminating 16,000 corporate positions to reduce management layers and cut costs
Amazon unveils fourth-quarter 2025 results Thursday after the market closes. The spotlight falls on Amazon Web Services and its growth trajectory.
Wall Street projects revenue of $211.4 billion with adjusted earnings per share reaching $1.97. Current quarter expectations sit at $175.6 billion in revenue and $1.73 EPS.
UBS analyst Stephen Ju reaffirmed his Buy rating Tuesday while lifting the price target to $311 from $310. His bullish stance centers on AWS expansion plans.
Ju calls Amazon a “coiled spring” poised for growth. The driver is ongoing AWS capacity additions and revenue acceleration.
Cloud Unit Outperforms
Amazon Web Services crushed third-quarter estimates in October. The division generated $33 billion in revenue versus analyst expectations of $32.5 billion.
Company executives outlined plans to double AWS capacity by 2027 during the conference call. This expansion strategy triggered upward revisions from analysts.
UBS lifted its aggregate capital expenditure forecast to $344 billion for Q4 2025 through Q4 2027. That represents an increase from the prior $300 billion estimate.
AWS-specific capital spending projections climbed from $225 billion to $260 billion across the same period. UBS argues the market hasn’t priced in AWS revenue doubling by 2028.
Financial Upside Potential
The heightened capital intensity could produce an extra $20 billion in free cash flow by 2028. UBS analysts arrived at this figure based on AWS growth modeling.
This represents the second straight quarter of AWS acceleration. Ju anticipates rising investor conviction will drive continued stock outperformance.
Amazon’s investments beyond cloud computing should boost financial performance. Improvements in e-commerce, content offerings, and LEO projects will enhance GMV, advertising revenue, and data monetization.
Workforce Reduction
Amazon revealed plans to cut 16,000 corporate jobs last month. Leadership pointed to eliminating organizational layers and reducing bureaucracy as key objectives.
The workforce reduction coincides with massive infrastructure investments in AWS. This suggests a strategy balancing operational efficiency with growth spending.
Thursday’s report will clarify whether AWS maintained its momentum through the December quarter. Growth rates and capacity metrics will be under scrutiny.
Management guidance on AWS demand patterns and spending priorities will influence trading. Investors seek assurance that capacity investments will convert to revenue gains.
The March quarter outlook offers a window into Amazon’s confidence entering 2026. Stronger-than-expected guidance could propel shares higher in Friday trading.
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