Amazon AI and ADP jobs

December 3, 2025

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Summary

Amazon is hosting its Amazon Web Services (AWS) conference this week. So there's lots of chatter about its AI offering relative to competitor AI cloud providers.

We'll also talk briefly about monthly payrolls from ADP. In absence of the regular govn jobs figures (delayed by the shutdown), the ADP reports have taken on greater importance.

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Amazon AWS

Amazon is hosting its AWS conference this week.  The company gave an update on the release of its own in-house chip development (to compete with Nvidia’s GPU and Google’s TPU).  The company claimed the newest version has impressive speed versus cost characteristics.

Interestingly, however, the star of the show seems to be Google.  Every AWS announcement and initiative is being compared to the similar offering at Google.   An impressive turnaround for a company who was on the cover of Barron’s this past summer as a company in potential secular decline!

In their note this morning, the JP Morgan analyst wrote:  “Across our industry conversations, OpenAI, Gemini, & Anthropic are consistently viewed as the leading AI models, & Google’s full-stack strategy — TPUs, Vertex, Gemini — is resonating with cloud customers & likely supporting strong revenue growth.”

But for Amazon specifically, the reviews are also very strong.   AWS remains the market leader in cloud services.  And it’s fighting aggressively to retain that lead with several new AI offerings.  

Interestingly, AMZN is underperforming the market YTD.  Results and growth have been solid.  But it doesn't have the EPS growth of Nvidia.  And unlike Google or Broadcom, AMZN already had a big valuation coming into the year.  Both Google and Broadcom have benefited from multiple expansion this year.  

Amazon meanwhile has seen its PE multiple compress over the past decade. See the chart below. Amazon's valuation has fallen from the 80-100x range down to inline with its large cap peers in the low 20's now.

AMZN Forward PE Multiple

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ADP Payrolls

It’s the first week of the month.  So you know what that means… jobs week!   The ADP monthly jobs number came out today.  And it was bad.  There’s really no other way to say it.  ADP estimates the total number of jobs shrank by -31k in November versus October.  

On a year/year basis, the report said only +0.6% growth in jobs.   Over the past 50 years, whenever job growth has fallen below +1.0% annually, a recession happened soon after.  Every time.

As for the government payrolls data, it’s delayed by the shutdown.  The BLS expects to release its payroll figures for both October and November on December 16th. (The regular government payrolls and unemployment data is delayed by the govn shutdown. So we'll have to wait a couple weeks for that data to see if it lines up.)

As a result of all this, interest rates are falling a bit today.  A cut by the Fed next week is a virtual lock (according to the futures market).  The real question will be what does the Fed do next?