The Briefing: Amazon’s Cloud Lifts

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The Briefing

Oct 30, 2025

The Briefing

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The cloud over Amazon is lifting. The e-commerce and cloud giant reported Thursday that its cloud unit, Amazon Web Services, accelerated revenue growth by nearly 3 percentage points to 20% in the third quarter, its fastest rate of expansion since the end of 2022. That means AWS, by far the biggest of the major cloud firms, has joined its nearest rivals, Microsoft Azure and Google Cloud, in showing accelerating growth. The news sent Amazon stock, the worst-performing big tech stock this year, shooting up 13% in after-hours trading.

Amazon needed this as proof that its heavy investment in AI is generating incremental business. While each of the big tech companies is ramping up capital expenditures for new AI data centers, Amazon is spending more than anyone else, as befits its share of the cloud sector. In the latest quarter, for instance, it spent $34.2 billion on capex, and it expects to finish the year with a total capex bill of $125 billion. (Google, by comparison, expects to spend as much as $93 billion.) For the first three quarters, Amazon has spent more on capex than it generated in cash from operations—which means the company was burning cash. But its fourth quarter, inflated by holiday sales, is typically a whopper, so the free cash flow picture will likely improve then.

CEO Andy Jassy defended the heavy capex investment on Thursday's earnings call, saying that "as fast as we're adding capacity," Amazon is making money off it. While he didn't specify how much AI rather than older products drove AWS' revenue acceleration, he talked a lot about customer demand for new AI services and Amazon's internally developed Trainium AI chip. The message: Amazon is spending a boatload of money on AI but it's going to be worth it. Amazon shares steadily appreciated through the call, signaling that investors believe him.

The performance should put to rest for the moment any worries that AWS has been losing ground to Azure and Google Cloud. Some of those worries were arguably exaggerated. As Jassy pointed out, AWS' much bigger size makes growth rate comparisons to smaller rivals hazardous. While Microsoft doesn't report Azure revenue regularly, CEO Satya Nadella said on Wednesday Azure's annual revenue surpassed $75 billion in the latest quarter, while AWS' latest quarter puts it on an annual revenue run rate of $132 billion. Google is meaningfully smaller than Microsoft (and Google's numbers include its workplace productivity suite of software).

But the sheer gulf between the growth rates obscured those nuances—Azure grew at 39% to 40% in the past two quarters, for instance, a few points faster than Google Cloud. Before this most recent quarter, AWS had been growing at a rate of 17.5%. Investors will surely want to see AWS' growth continuing to accelerate, but for now, they seem to be reassured about Amazon.

No Big Deal for CoreWeave

CoreWeave's acquisition spree hit a wall Thursday when shareholders in data center developer Core Scientific voted down the cloud company's $9 billion all-stock acquisition offer. But this might not be the last we hear about CoreWeave trying to become a true data center operator via acquisition.

Shares in CoreWeave have soared almost 240% since its March initial public offering, which in theory should give it valuable currency for acquisitions. But Core Scientific shareholders were likely worried the stock was overinflated—a particular issue given that the offer didn't contain any protections to guard against a stock drop. As it turns out, CoreWeave stock fell more than 6% on the news that the deal had cratered.

While CoreWeave has been on a buying streak, purchasing a string of smaller software companies, the Core Scientific deal was different both in scale and in terms of its importance to CoreWeave's business. The company has borrowed heavily to buy chips. It leases data center capacity for the chips and rents them to clients, in particular AI companies like OpenAI. Core Scientific owns data centers and leases some of that capacity to CoreWeave.

A deal would have helped CoreWeave become a more vertically integrated cloud company that owns data centers instead of leasing them. It would have saved CoreWeave $500 million a year by the end of 2027 by eliminating $10 billion in lease liabilities that it owes to Core Scientific. CoreWeave also hoped owning the data centers directly would help it raise cheaper debt from a wider base of lenders.

Instead, CoreWeave is now going to have to find other ways to lower the costs associated with its debt-heavy business model. It is paying as much as 4 percentage points over U.S. Treasurys, a rate typical for high-risk borrowers. CoreWeave had $11.1 billion of debt and about $1.2 billion of cash at June 30.

Core Scientific would have been a uniquely beneficial acquisition for CoreWeave, given its big leasing footprint at Core Scientific data centers, but the same logic could push it toward deals with other data center operators. There are more than a few publicly traded bitcoin miners trying to make the transition to building data centers for cloud companies and several privately held companies trying to become bigger players in AI data centers. As long as CoreWeave's stock stays as rich as it is, expect the company to keep on the hunt.—Miles Kruppa

In Other News

• Apple reported an 8% jump in revenue for its fiscal fourth quarter and forecast even stronger growth during the holidays due to demand for its latest iPhones. More here.

• Elon Musk's SpaceX said Thursday it's considering changing unspecified parts of its plan to land U.S. astronauts on the moon after the head of NASA said the company is "behind schedule" and the agency would consider alternative bids.

• NBCUniversal's Peacock streaming service appears to be stalled. The service's subscribers were flat at 41 million in the third quarter, NBCU's parent company Comcast reported on Thursday. NBCU reported the same subscriber number for the first half of the year.

• Shares of travel software business Navan fell 18% on its opening day as a public company.

• Meta Platforms is planning to sell at least $25 billion of corporate bonds on Thursday and was swamped with demand, Bloomberg reported.

• Italian conglomerate Bending Spoons, which said Wednesday it would buy AOL, said Thursday it had raised $2.8 billion in debt and $270 million in new equity. The equity raising valued Bending Spoons at $11 billion, excluding the new money.

Today on The Information's TITV

Check out our latest episode of TITV with our detailed breakdown of Meta, Microsoft, Google and ServiceNow earnings with our newsroom and VCs Tomasz Tunguz and Roy Bahat.

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