Amazon’s Big Test: Can AWS Reaccelerate as the Holidays Kick Off?

With input from CNBC, Business Insider, and USA Today.

Amazon reports third-quarter results after the bell, and two storylines will dominate: whether AWS can keep pace in the AI arms race, and how the retail machine is set up for the holidays.

Wall Street’s baseline is upbeat but not euphoric. Analysts expect earnings of about $1.57 a share on roughly $177.8 billion in revenue — an 11.9% year-over-year lift. Under the hood, investors will zero in on AWS at about $32.4 billion and advertising at roughly $17.3 billion.

Cloud is the swing factor. AWS growth is projected near 18% year over year — steady with last quarter but trailing the sprint from rivals, with Google Cloud up 34% and Microsoft’s Azure up 40% in their latest prints. That gap has stoked questions about AI momentum, especially after a high-profile AWS outage last week and headline-grabbing AI deals landing elsewhere (Anthropic deepening ties with Google; Meta cutting cloud pacts with Google and Oracle). Amazon’s counter: it opened its $11 billion Project Rainier AI data center and says Anthropic — where Amazon has invested $8 billion — will run on 1 million Trainium2 chips by the end of 2025. CEO Andy Jassy keeps stressing AWS’s share lead and that it’s still “early” in AI.

Retail gets its own spotlight with holiday peak season about to start. Amazon plans to hire 250,000 seasonal workers again, and Adobe expects US online holiday spend to rise 5.3% to $253.4 billion — slower than last year’s pace but still solid. Prime Day’s July event was a strong warm-up, moving an estimated $24.1 billion online in the US, up 30% from a year earlier. Jassy has also said shifting tariff policies haven’t noticeably dented demand or pricing so far this year.

The setup into Q4: the Street is modeling about $208.1 billion in holiday-quarter sales, up 10.8% year over year. At the same time, Amazon just announced roughly 14,000 corporate layoffs as it trims bureaucracy and plows more investment into AI and infrastructure — changes that could help margins if AWS re-accelerates and retail advertising keeps compounding.

Bottom line: tonight’s call needs to show AWS is converting AI buzz into bookings, that retail margins can hold up into peak season, and that the cost cuts are fuel — not friction — for 2026 growth.