7 Key Takeaways from Amazon's Q3 2025 Earnings
Updated November 2025
Dear Investor.
Zee Here. Amazon continues to evolve beyond retail with AI, healthcare, and logistics innovations. The company continues to push into new territories while strengthening its core businesses.
Here are seven recent developments that investors should have on their radar:
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1. AI is Becoming Amazon’s Secret Weapon
Amazon Web Services (AWS) is going all-in on artificial intelligence, and it’s paying off. The company’s AI services are growing rapidly, with customers using Amazon’s cloud infrastructure to build and deploy AI applications. AWS recently expanded its AI chip offerings, including custom-designed chips that compete with Nvidia’s processors at lower costs. This could significantly boost profit margins as AI demand explodes.
2. The Pharmacy Business is Growing Fast
Amazon Pharmacy is quietly becoming a major player in healthcare. The service now offers prescription delivery to millions of Americans, often at prices lower than traditional pharmacies. With healthcare costs rising, Amazon’s push into this sector could unlock a massive new revenue stream while building customer loyalty.
3. Advertising Revenue is Booming
While most people think of Amazon as a retailer, its advertising business is now its fastest-growing segment. Brands pay premium rates to advertise on Amazon because shoppers on the platform are already looking to buy. This high-margin business is becoming increasingly important to Amazon’s overall profitability.
4. Same-Day Delivery is Expanding
Amazon is dramatically expanding its same-day and one-day delivery capabilities. The company has been building out smaller, localized fulfillment centers in urban areas to get products to customers faster than ever. This logistics advantage makes it harder for competitors to keep up and keeps customers coming back.
5. AWS Still Dominates Cloud Computing
Despite growing competition from Microsoft and Google, AWS remains the king of cloud computing with about 31% market share. The cloud business generates the lion’s share of Amazon’s operating profit, essentially subsidizing the company’s other ambitious ventures. Recent quarterly results showed AWS growth reaccelerating, which excited investors.
6. Cost-Cutting Measures are Improving Margins
After years of aggressive spending, Amazon has been focused on efficiency. The company has reduced its warehouse footprint, cut tens of thousands of jobs, and streamlined operations. These efforts are showing up in better profit margins, which has been well-received by Wall Street.
7. International Expansion Continues
Amazon is doubling down on international markets, particularly in India and emerging economies. While these markets aren’t yet as profitable as North America, they represent huge long-term growth potential as middle classes expand and e-commerce adoption increases.
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All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.
The advertisng revenue growth being the fastest segment is underrated. High margin ad business subsidizing AWS infrastructure spend is a powerful flywheel. Amazon Pharmacy competing with traditional players like CVS could disrpt a $500B market, especially if they bundle with Prime. The custom AI chips competng against Nvidia shows Amazon's willingness to vertically integrate where margins matter most.