#AI

Amazon shares soared after a strong Q3 earnings report, driven by a resurgent Amazon Web Services (AWS). AWS revenue grew 20% year-over-year, exceeding expectations and signaling successful capitalization on AI demand. CEO Jassy’s confident outlook alleviated investor concerns about competition from Azure and Google Cloud. AWS’s robust $200 billion backlog and increased capital expenditure, particularly in AI infrastructure, position it for sustained market leadership as AI workloads drive future cloud spending.

Alphabet’s Q3 earnings report exceeded expectations, sending shares up 4%. Revenue hit $102.35 billion, a first for the company. Increased capital expenditure, now projected at $91-93 billion, reflects investment in AI infrastructure and Google Cloud’s growth. Google Cloud backlog reached $155 billion. Analysts see Alphabet addressing AI concerns and revised price targets upwards, with Goldman Sachs setting a $330 target and JPMorgan $340, highlighting confidence in Alphabet’s execution and AI’s positive impact on Google Search revenue.

Dynamix Corporation III raised an upsized $175 million in its IPO, potentially reaching $201.25 million with additional shares. The SPAC targets acquisitions in AI, energy, or digital assets, aiming for companies valued at $1 billion or more. Advisors from Prologis and Nvidia will aid in identifying suitable targets. This debut occurs during a cautious recovery phase for the SPAC market after a period of decreased activity and scrutiny, requiring Dynamix III to demonstrate strong valuation and synergies to investors.

Navan, formerly TripActions, a corporate travel and expense management platform, went public on Nasdaq (NAVN) with a $6.2 billion valuation following a $923 million IPO. Shares dipped 20% despite pricing at $25, the midpoint of its range, which was lower than its $9.2 billion 2022 private valuation. Navan distinguishes itself with AI integration and a focus on traveler experience, boasting clients like Geico and OpenAI. It reported strong revenue growth but also a recent quarterly net loss, making profitability a key focus.

Amazon Web Services (AWS) reported a strong 20% revenue increase in Q3, reaching $33 billion and exceeding expectations. Despite facing growing competition from Google Cloud and Microsoft Azure, AWS’s operating income rose 9% to $11.4 billion, contributing significantly to Amazon’s overall profit. Amazon’s recent $11 billion AI data center, Project Rainier, and its investment in Anthropic highlight its focus on AI cloud services amid intensifying competition, spurred by significant partnerships between other tech giants and cloud providers.

Reddit’s Q3 earnings exceeded expectations, with revenue jumping 68% year-over-year to $585 million and EPS at 80 cents. Growth was fueled by strong advertising and data licensing, with the latter becoming increasingly important as companies like Google and OpenAI leverage Reddit’s data for AI training. Global daily active users reached 116 million, a 19% increase. While US logged-in DAU growth slowed, Reddit focuses on improving user experience and international marketing to drive further engagement. Q4 sales are projected to reach $655-$665 million.

While tech giants aggressively invest in AI data centers, Apple employs a “hybrid” strategy, blending internal infrastructure (“Private Cloud Compute”) with third-party resources. CFO Kevan Parekh highlights this balanced approach, prioritizing scalability and data privacy. Though Apple’s capital expenditure is increasing (projected $14.3 billion this year), it’s comparatively restrained. Apple Intelligence, utilizing proprietary chips, influences purchasing decisions. Operating expenses, driven by R&D, also reflect AI investments. Apple remains optimistic about future AI impacts, projecting sales growth despite concerns surrounding its unique AI strategy.

Apple briefly surpassed a $4 trillion market cap, driven by iPhone 17 demand, favorable antitrust rulings securing its Google search deal, and strategic domestic manufacturing investments. Analysts at Bank of America and JPMorgan express optimism, projecting earnings growth and raising price targets based on future AI prospects. While AI rollout delays raise concerns, strong iPhone sales and tariff management contribute to a positive outlook. Upcoming earnings are crucial to validate the iPhone upgrade cycle and demonstrate sustained growth amid competition.

Alphabet’s Q3 earnings exceeded expectations, driving shares up 5% after-hours. Revenue reached $102.35 billion, with EPS at $3.10. Google Cloud’s revenue grew 35% to $15.15 billion, fueled by AI demand. Alphabet is increasing 2025 capital expenditure to $91-93 billion. YouTube ad revenue hit $10.26 billion, and overall ad revenue was $74.18 billion. Net income surged to $34.97 billion, despite a $3.45 billion EU antitrust fine. Cloud customer base growth is high, and AI product use is increasing.

Microsoft’s fiscal Q1 exceeded expectations, driven by a 40% Azure revenue surge. While overall revenue rose 18% to $77.67 billion, and net income increased, the stock dipped due to anticipated capex increases for AI and cloud infrastructure. The Intelligent Cloud unit generated $30.9 billion, surpassing estimates. Microsoft anticipates continued growth, forecasting $79.5-$80.6 billion for fiscal Q2. Microsoft’s investment in OpenAI impacted net income by $3.1 billion.