Amazon Defends Massive AI Investment

Amazon forecast its sales will rise between 12% and 16% year-on-year in the fourth quarter to between 240 billion and 247 billion US dollars, despite an unfavourable impact of approximately 60 basis points from foreign exchange rates.  Amazon also said it continues to expect 2026 cash capital expenditures to be approximately 220 billion dollars.  

“Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 (184 billion dollar revenue run rate) and projected revenue growth rates of over 40% both in 2027 and in 2028,” said Andy Jassy, CEO of Amazon. “Our broader selection and speedier delivery are helping us capture more retail market segment share with improving margins, and our newer businesses, ranging from Grocery to Pharmacy to Amazon Leo to Zoox are progressing encouragingly. There has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years.”

On the Amazon earnings call, Jassy went on to say that AI is "the biggest transformation in our lifetime..... We are the leader today in the, I’ll call it the infrastructure and AI space. Would it be more convenient if this type of acceleration and opportunity happened over 25 years and you could spread the CapEx over 25 years? Yeah, it might be more convenient, but that’s not the world that we live in, and that’s not the opportunity. We can fund this plan. I think it will forever change the size of Amazon. It will forever change our revenue, it will forever change our free cash flow, and we’re going to invest, and we’re going to pursue it to continue to be the significant leader like we are today." Source: Amazon

Alphabet Claims AI Models are at Inflexion Point

Alphabet reported a 25% year-on-year increase in revenue in constant currencies for the third quarter to 127.6 billion US dollars. Cloud revenue more than doubled to 30.7 billion dollars, driven by demand for AI infrastructure, AI solutions, and sales of TPU systems.

Alphabet said it is seeing strong usage of its new AI model Argon, which it launched two weeks ago. "In fact, on our developer platforms, usage in the first week ramped up 3.5x faster than Gemini 3, even with capacity constraints," CEO Sundar Pichai said. "Developers and cloud customers are already using it for things like untangling legacy code bases, accelerating scientific research, robotics, discovering product improvements and domain-specific tasks requiring in-depth reasoning." 

Pichai went on to say he saw a "huge point of inflexion [in coding productivity] once we've started deploying Argon internally."

Alphabet also announced the Carbon frontier model, which it says "outperforms Argon across almost every domain like full stack web development, multimodal understanding, complex knowledge work and scientific reasoning." Meanwhile, the company said its new Genie 4 advanced world model "simulates safe, realistic, interactive worlds with native audio in real time. This is an important building block for training robots and agents." 

Alphabet added that Waymo, its self-driving ride hailing service, has now driven 300 million fully autonomous miles, up from 100 million in July 2025.

However, Alphabet also noted that searches in AI Mode, have "lower monetisation" than traditional search queries, curbing growth in that business. Source: Alphabet

SpaceX Reports Big Rise in Connectivity Revenues

SpaceX reported a 69% year-on-year increase in connectivity revenues to 5.2 billion US dollars for the third quarter, after adding 1.6 million Starlink consumer subscribers in the quarter.  SpaceX also said it has surpassed 22 million monthly users on Starlink Mobile, up 37% quarter-over-quarter.  

Elon Musk predicted that in "three to five years, there’s probably a demand for 1,000x more bandwidth than there is currently, because AI or SI agents will, on a per agent basis, use far more bandwidth than a person, and there will be far more agents than there are people. This ends up requiring a several order communication bandwidth in order to satisfy that communication demand." 

SpaceX also claimed that, at current pricing, new compute deployments are generating a payback of less than a year. It reported capital expenditures in the third quarter of 19.6 billion dollars, primarily in support of its compute build out, Starship infrastructure, and satellite production. It forecast that fourth quarter capital expenditures will now be in the range of 35 billion to 40 billion dollars. Source: SpaceX