Amazon.com, Inc. Q3 FY2025 earnings call

• AWS: Growing at 20.2% y-o-y, largest growth rate in 11 quarters; backlog at $200 billion; added over 3.8 gigawatts of power in past 12 months; Trainium2 growing 150% q-o-q; Project Rainier with Anthropic; AgentCore, Kiro, Transform, QuickSleep, and Amazon Connect as examples of customer-focused AI tools.
• Stores: Offered 14% more selection since last quarter; added hundreds of thousands of items from popular brands; Everyday Essentials growing nearly twice as fast; perishable groceries available with same-day delivery in over 1,000 cities; Rufus on track for $10B+ incremental sales; AI-powered features like generative AI audio and Amazon Lens with Lens Live.
• Amazon Ads: Strong growth at 22% y-o-y; partnerships with Roku, Netflix, Spotify, SiriusXM; AI tool and creative studio for advertisers; growth in Prime Video live sports advertising.

AWS: Revenue was $33 billion, up 20.2% year-over-year, with an annualized revenue run rate of $132 billion. Stores: Saw strong growth with innovations like AI-powered shopping assistant Rufus having 250 million active customers, monthly users up 140% y-o-y, interactions up 210% y-o-y, and on track to deliver over $10 billion in incremental annualized sales. Amazon Ads: Generated $17.6 billion in revenue, up 22% year-over-year, with strength across its portfolio including partnerships and AI-driven innovations.

Guidance: Expect full year cash CapEx to be approximately $125 billion in 2025, increasing in 2026; assumes no additional business acquisitions, restructurings, or legal settlements; capacity investments to continue with plans to double capacity by 2027 and add at least 1 gigawatt of power in Q4 2025.

• Fluctuations in foreign exchange rates
• Changes in global economic and geopolitical conditions
• Tariff and trade policies
• Customer demand and spending, including recessionary fears
• Inflation, interest rates, regional labor market constraints
• World events, rate of growth of Internet, online commerce, cloud services, and new technologies

Q: Can you go through how you're feeling about your capacity levels and how capacity constrained you are right now? And talk about the demand you're seeing outside of your major customers for Trainium?

A: On capacity, brought in 3.8 gigawatts in past 12 months with another gigawatt plus in Q4; expect to double capacity by 2027. On Trainium, Trainium2 is fully subscribed, growing 150% q-o-q; Trainium3 to preview end of 2025 with medium-sized customers interested.

Q: Sort of a philosophical chip question. How do you think about the key hurdles of Trainium3 need to overcome to really make Trainium adoption broader?

A: We have deep relationships with NVIDIA; our own chip team with Annapurna; Trainium offers 40% better price performance; need to deliver chip in volumes, software ecosystem, and build proof points like Project Rainier.

Q: Talk a little bit about the architecture of Project Rainier and how it's differentiated and what that means for customers and for AWS. And do you expect Rainier to expand beyond Anthropic?

A: Project Rainier uses Trainium2 chip in large cluster; infrastructure capabilities and chip performance are key; specific to Anthropic but other customers interested in Trainium3 clusters.

Q: On groceries, does this mean you no longer need Amazon Fresh stores? And on head count, how do you think about head count going forward?

A: Groceries with same-day delivery expanding to 2,300 cities by end of 2025; head count announcement was about removing layers, increasing ownership, operating like a start-up.

Q: Reflect on the opportunity of rolling out more robotics and automation and physical AI across operations?

A: Over 1 million robots in fulfillment network; robotics improve safety, productivity, speed; humans remain central, robots and humans will complement each other.

Q: How does Amazon think about agentic commerce going forward?

A: Excited about agentic commerce; Rufus and Buy for Me are efforts; expect to partner with third-party agents to expand online shopping, focusing on improving customer experience.

Q: How much of the AWS acceleration is driven by core infrastructure versus AI workload monetization? And disaggregate advertising contribution?

A: AWS acceleration from both AI (inference, training, Trainium) and core infrastructure; advertising growth from full funnel offering, partnerships, DSP, Prime Video, and stores opportunity