Latest / Connecting the Dots / Amazon, Apple, and AI Deals: Tech Titans Keep Climbing

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Amazon, Apple, and AI Deals: Tech Titans Keep Climbing · Connecting the Dots

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  Today's tech news moves fast, but understanding
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  it shouldn't be hard. That's why Snarfl Solutions
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  Group brings you Connecting the Dots, where we
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  break down what's happening in tech and why it
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  matters to you. Now, let's dive in with your
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  hosts. Welcome to Connecting the Dots from Snarfl
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  Solutions Group. I'm Alex. And I'm Morgan. Thanks
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  for joining us. It is Friday, October 31st, 2025.
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  Halloween. Hope you've got your costumes ready.
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  Or at least your candy bowls filled. quick check
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  on the weather here in Sacramento looking lovely
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  sunny high around 78 Fahrenheit nice nationally
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  though a bit more active pretty gusty winds hitting
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  the mid -atlantic and northeast and keep an eye
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  on the northwest later today And into Saturday
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  looks like an atmospheric river setting up. Moderate
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  to heavy rain, some mountain snow, and high surf
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  expected there. Okay, turning to the markets.
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  A bit of a mixed picture to end the week, but
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  generally positive overall. Right. The Dow Jones
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  closed at $47 ,580. That's down just a touch
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  today, 0 .17%. But still up for the week about
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  0 .35%. Exactly. And the S &P 500 followed a
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  similar pattern, closed at $6 ,867 .43. Also
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  down slightly today point one seven percent,
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  but up point three two percent for the week So
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  holding steady mostly and Bitcoin always interesting
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  to watch. Yeah, it's a nice little jump today
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  actually up one point four one percent closing
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  at a hundred and nine thousand eight hundred
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  and sixteen point six six Hmm, but still down
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  for the week overall still down for the week.
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  Yeah about three point seven eight percent But
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  you know that pop today is interesting shows.
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  There's still appetite there. Definitely something
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  to watch Now, before we dive into the tech news,
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  .com. Okay, let's get into it. Time for our Morningstar
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  report, today's top three tech stories and what
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  they actually mean for you. Let's start with
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  Amazon. Huge news out of their Q3 earnings. Huge
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  is right. Shares surged, what, over 13 % after
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  they just blew past expectations? Incredible
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  jump. So what drove that? Let's break down the
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  revenue streams. Well, a big piece was advertising
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  services revenue. That jumped 24 % year over
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  year. 24%. Yeah. to $17 .7 billion, beat the
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  estimates of $17 .3 billion. And that's not just
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  ads on the shopping site anymore, is it? Not
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  at all. I mean, think about their reach. Over
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  300 million global ad -supported viewers and
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  listeners across Prime Video, Twitch, MGM, Wondry,
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  Amazon Music. Wow. That's a massive audience.
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  It really is. They're a major player competing
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  directly with Google and Meta now. for those
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  ad dollars. And subscription services, Prime
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  and the like. Also strong, up 11 % year over
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  year to $12 .6 billion. OK, and AWS. The cloud
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  business is always key. Absolutely key. And it
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  had its fastest growth pace since 2022. Revenue
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  was up 20 % to $33 billion. 20 % growth. That's
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  accelerating again. What's behind that seems
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  to be strong demand and AI plus their core infrastructure
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  services are still you know booming AWS is really
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  firing all cylinders and they're seeing success
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  in their content to write I saw some numbers
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  on prime video Yeah, definitely like Thursday
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  night football average viewers were up 16 % hitting
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  15 .3 million. That's a solid number for streaming
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  football and the summer I turned pretty Season
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  3 viewership apparently beat season 2 by 65 %
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  so people are definitely watching. Okay, so Massive
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  revenue growth, booming ads, accelerating cloud,
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  hit shows. But didn't they also just have huge
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  layoffs? Ah, yes. That's the paradox, isn't it?
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  14 ,000 layoffs amid these record results. I
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  saw operating income was basically flat. Right.
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  Operating income came in at $17 .4 billion, pretty
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  much flat. And when you dig into it, you see
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  why. There was a $2 .5 billion charge for that
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  FTC settlement. Oh. And $1 .8 billion in severance
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  costs from those layoffs. So those two things
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  basically wiped out the gains on the operating
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  income line for the quarter. Pretty much. But
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  here's where it gets interesting strategically.
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  CEO Andy Jassy didn't really frame the layoffs
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  around immediate financial pressure or even AI
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  taking jobs. Oh, what was the rationale then?
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  He called it a culture move. He talked about
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  wanting Amazon to operate like the world's largest
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  startup. The world's largest startup. Meaning
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  what, exactly? Leaner? Faster? Exactly. Lean,
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  flat, organizational structure moving quickly.
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  He's essentially saying they need to cut layers
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  in bureaucracy to maintain agility, especially
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  with AI changing everything so fast. So it's
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  less about cutting costs today and more about
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  positioning for speed tomorrow. Investing in
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  agility almost. That seems to be the argument.
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  Paying the severance now is an investment in
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  being able to pivot and innovate faster down
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  the line. It's a bold move framing it that way.
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  It really is. Shedding weight to run faster in
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  the AI race. Okay, let's shift gears to another
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  tech giant, Apple. Also, big earnings news from
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  them. Yep, Apple reported Q4 revenue of $102
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  .47 billion. That's up 8 % year over year. Solid
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  growth. But the real standout number for Apple,
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  it seems, was services. Oh, absolutely. Services
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  revenue hit an all -time record, $28 .75 billion.
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  All -time record, wow. What's included in services
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  again? That's things like the App Store, Apple
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  Pay, Apple TV, Apple Music, iCloud. Basically
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  all their subscription and recurring revenue
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  streams and that growth was strong really strong
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  up 15 % year -over -year. That's high margin
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  predictable Revenue which investors love right
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  and I noticed they rebranded the streaming service
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  just Apple TV now dropped the Plus cert. Yeah.
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  Simplifying the branding. Makes sense. What about
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  the iPhone? It's still the core product, right?
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  Still the core. And it performed well. iPhone
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  sales hit 49 .03 billion, up 6%. That actually
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  set a September quarter record for iPhone revenue.
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  Even with the new iPhone 17 models having some
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  launch constraints, apparently. Right. Joe's
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  the underlying demand is still incredibly strong.
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  But like you said, the services story is becoming
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  increasingly central, and their content plays
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  are a big part of that. Speaking of content,
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  that Formula One movie, F1. That did really well,
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  didn't it? It did huge numbers. Box Office was,
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  what, $629 million worldwide? A massive success
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  for them. And that led to something bigger, right?
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  With actual F1 races. Exactly. Leveraging that
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  movie's success, Apple went and secured the exclusive
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  U .S. rights to broadcast Formula One races.
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  Exclusive U .S. rights? Starting in 2026, for
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  five years. That's a major sports content acquisition.
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  It shows how serious they are about making Apple
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  TV a destination. So, using movies to build buzz
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  and relationships, then locking down premium
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  live sports, that really boosts the value of
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  the whole services bundle. Precisely. The hardware
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  gets people into the ecosystem, but services,
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  especially with unique content like F1, keeps
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  them there and paying. Okay, but there's another
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  big piece to Apple's future. AI. How are they
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  doing there? They've been seen as maybe lagging
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  a bit behind rivals like Meta and Google. That's
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  definitely the perception. And this earnings
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  report shows they're spending heavily to catch
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  up, or at least integrate AI more deeply. R &D
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  spending was up 14%. 14 % jump in R &D, and that's
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  focused on AI. Focused squarely on AI, yes. They
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  highlighted upcoming features like live translation,
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  that workout buddy thing, features that weave
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  AI into the daily user experience on their devices.
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  Hmm. But is a 14 % increase enough? I mean, if
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  they're playing catch -up, is this just the cost
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  of entry now, or are they really aiming to lead?
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  Features like live translation, others have had
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  that for a while, right? That's a fair question.
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  Yeah. It does feel like some of these initial
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  features are about reaching parity, but the level
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  of spending suggests a serious long -term commitment.
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  So maybe it's table stakes now. You have to spend
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  big on AI just to keep your premium products
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  feeling premium. I think that's part of it. They
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  need to deliver seamless integrated AI experiences
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  to justify their hardware prices and keep that
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  massive services engine humming. The cost of
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  not investing heavily in AI would probably be
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  much higher in the long run. OK, so Apple's leveraging
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  its hardware base to build this incredible services
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  record fueled by content like F1 and now pouring
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  money into AI to protect and enhance that whole
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  ecosystem. Makes sense. Exactly, which brings
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  us nicely to our third story. This one is really
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  about the plumbing, the legal foundation for
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  this new AI world. It involves Getty Images.
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  Right, the big photo agency. They struck a deal
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  with an AI company. Yeah, with Perplexity AI.
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  It's a global multi -year licensing agreement.
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  Essentially, Perplexity gets to use Getty's vast
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  library of high -quality images within its AI
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  search and discovery tools. And the market liked
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  this news. Oh, the market loved it. Getty images
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  stock absolutely skyrocketed, jumped over 55
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  % after the announcement. 55 % just from this
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  one deal? Well, it signals something really important.
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  It's about the legal and ethical side of AI development.
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  How so? What are the key terms? The crucial part
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  is that Perplexity agreed to provide proper attribution
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  for the images. That means including image credit
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  and importantly a link back to the source on
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  Getty. Okay, that does sound significant because
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  a lot of AI models were trained on, well, basically
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  everything scraped from the web without permission
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  or payment, right? Exactly. It's been a huge
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  point of contention, lawsuits flying, debates
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  about copyright. This deal is a concrete example
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  of an AI company proactively licensing content
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  and agreeing to respect creators' rights and
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  attribution. A shift from scrape first, ask forgiveness
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  later, to license properly upfront. Precisely.
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  And the massive stock jump shows how valuable
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  the market thinks that legitimate, legally licensed
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  approach is going to be. It builds trust. Tell
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  us a bit more about Perplexity. They're relatively
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  new, aren't they? Yeah, founded in 2022. They
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  position themselves as an answer engine, not
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  just a search engine. They aim to give direct
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  answers to questions, but crucially with citations
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  linking back to the sources. OK, so citations
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  are core to their model and they're getting traction.
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  A lot of traction. They say they're answering
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  over 150 million questions a week now. And their
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  valuation shot up recently to around $20 billion.
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  $20 billion. Wow. Weren't they also the ones
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  who made that audacious bid for Google Chrome?
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  That's them. The $34 .5 billion bid. Most people
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  saw it as a massive marketing stunt. to get their
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  name out there. Well, it worked. We're talking
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  about them. It did. And there's constant chatter
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  among analysts about whether Apple should just
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  buy Perplexity to jumpstart its own AI search
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  capabilities, linking back to our Apple discussion.
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  Interesting connection. So this Getty deal helps
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  Perplexity look more legitimate, more sustainable,
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  less risky legally. Absolutely. In a field where
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  many AI startups are facing legal headwinds over
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  training data, Perplexity is making deals, paying
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  for content, agreeing to attribution. It makes
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  their whole model look more durable and, frankly,
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  more ethical. A very important development in
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  how AI interacts with existing content industries.
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  online at skone .com .com .com. Okay, so let's
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  quickly recap the three big takeaways from today's
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  tech news. Right, first up, Amazon. Huge quarter
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  driven by ads and AWS acceleration, but the key
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  strategic insight might be Jassy's world's largest
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  startup, framing for the layoffs, prioritizing
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  speed and agility for the AI future. Second,
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  Apple. Services revenue hit an all -time record
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  showing the power of their ecosystem and content
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  strategy underscored by that big F1 rights deal.
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  And they're ramping up AI spending significantly
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  to protect and grow that services engine. And
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  finally, the Getty Images and Perplexity AI deal.
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  It's a landmark agreement showing that legal
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  licensing and proper attribution for content
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  are becoming essential and valuable requirements
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  for AI companies. It signals a shift towards
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  a more responsible AI web. Three really important
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  shifts happening right now, fascinating stuff.
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  We're here to help at Snarful, so reach out on
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  our website if you have any more questions. That's
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  a wrap on today's top stories. Remember, tech
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  doesn't have to be complicated and we're here
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  to help connect the dots. If you've got questions
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  or want to learn more, visit us at snarful .com.
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  Thanks for listening and we'll catch you next
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  time.