The Exchange (CNBC): “Amazon Soars and What Happens If SNAP Stops?”

Date: October 31, 2025
Host: Contessa Brewer (in for Kelly Evans)
Special Guests: Mackenzie Sigalos (CNBC), Ron Josey (Citi), Amit Daryanani (Evercore ISI), Emily Wilkins (CNBC), Courtney Reagan, Kate Rogers, Bertha Coombs, Sam Stovall (CFRA), Mark Douglas (Mountain), Dom Chu, Steve Liesman

Episode Overview

This episode covers a blockbuster earnings week for big tech—highlighting Amazon’s record run, big AI-fueled spending, and key insights for investors. Midway through, the show pivots sharply to urgent policy news: as the government shutdown hits day 31, 42 million Americans face the imminent loss of SNAP food benefits. The team investigates the ripple effects across retail, restaurants, healthcare, and policy. The episode closes with perspectives on Fed rate cuts, the insurance boom from data center buildout, and how AI is supercharging targeted advertising.

Big Tech Earnings & AI Spending Frenzy

Amazon Leads the Market

• Amazon’s Q3 Earnings: Shares hit all-time highs, surging 10-11% after strong earnings and bullish AI strategy.
• Main driver: CEO Andy Jassy’s “own the compute backbone” vision (00:50), with AWS growing over 20%—its fastest pace in three years.
• Massive CapEx: The Big Four (Amazon, Alphabet, Meta, Microsoft) will spend over $380B on infrastructure in 2025.
  • Only Amazon and Alphabet are rewarded by Wall Street; their stock soars to fresh all-time highs.
  • Amazon's Q4 guide targets $210B revenue for the quarter—a potential industry first (03:20).

Notable Quote:

“The number one thing... everyone on the street was looking for was, ‘Will power reaccelerate?’ The answer was yes.”
—Ron Josey, Citi, (06:09)

AI Buildout & Power as a Competitive Edge

• “Project Rainier”: Amazon’s new infrastructure tailor-made for generative AI players like Anthropic.
  • Added 3.8GW of power in past 12 months; more expected to come online soon (06:38).
  • Amazon’s warehouse expertise and relationships with local governments speed up deployment versus rivals.

Notable Quote:

“Prior to the announcement... it was hard to know, and a lot of businesses were going to Google... Now that Amazon is powered up, I think they have more of a seat at the table.”
—Ron Josey, Citi (08:07)

Retail Health & Consumer Trends

• Amazon’s retail side: Agent commerce with “Rufus” chatbot and Alexa is driving new growth, contributing $10B in incremental revenue (09:05).
• Essentials up 20%+, and holiday shopping season reportedly “off to a decent start.”

Memorable Moment:

Host jokes that Alexa might soon start taking child-directed orders if not monitored.
—Contessa Brewer (10:00)

Apple: Upgrade Cycle & AI Strategy

• iPhone 17 sales expected to benefit from the “upgrade cadence” of pandemic-era buyers (10:44).
• AI Spend: Apple much more restrained at $1.5B versus tens of billions their rivals are spending.
  • Apple sees AI as a service enhancer, not an existential threat (13:45).

SNAP Benefits Ending: Human and Economic Impact

Policy Situation

• SNAP runs out on Nov. 1: Due to government shutdown, 42 million Americans risk losing food aid (16:37).
  • USDA contingency fund cannot cover even half of November needs.

Notable Quote:

“If the funding does run out, it would be the first time in the program's 60 plus year history…”
—Emily Wilkins, CNBC (16:54)

• Legal challenges and bipartisan talks are underway, but no breakthrough is expected this week.

Retail & Restaurant Ripple Effects

• Retail Hit:

  • Walmart stands to lose most; over 94% of SNAP shoppers bought food there last year (17:45).
  • Kroger and even Costco (despite membership) are next; discount chains like Dollar General/Dollar Tree “over-index” in SNAP shopper share.

• Restaurants & Small Biz:

  • Fast-casual (e.g., Chipotle, Cheesecake Factory, Shake Shack) noting softness tied to government shutdown, especially among lower- and mid-income consumers (20:10).
  • McDonald’s (Q3) will be a critical test of low-end consumer pullback.

Healthcare, ACA, and Regional Impacts

• ACA “enhanced tax credits” expire soon, raising premiums sharply; millions may drop coverage—especially in Texas and Louisiana (22:57).

  • UnitedHealth: expects 2/3 drop-off; Centene: forecasts 30% drop-off.

• Policy is directly hitting consumer wallets across food, retail, healthcare, and even travel.

Market Updates & Broader Economic Signals

Federal Reserve Division on Rates

Fed Division:

• 3 members (Beth Hammock, Lori Logan, Jeff Schmidt) publicly opposed the latest rate cut; warn of inflation still being too high (31:23).
• Powell says December cut is not a “done deal.”
• Market implication: Investors must prepare for a "divided Fed."

Notable Quote:

“He says inflation is actually spreading across categories. He sees it in both goods and services.”
—Steve Liesman (32:11)

Strategic Market and Retail Outlook

• Sam Stovall (CFRA): Despite consumer strain, retail expected to see 4%+ growth in 2025–26, with strong Q4 outlook. Stretched valuations, but earnings optimism persists (35:02).
  • XRT (retail ETF) showing improved momentum.
• Data Centers: Vertiv highlighted as a beneficiary of Big Tech’s AI infrastructure arms race (36:56).

Data Center Buildout: Insurance and Infrastructure Innovation

Insuring the AI Revolution

• Data center construction for AI is driving massive insurance demand.
  • Edmund Reese (Aon): Next year, $10B in insurance premiums just for data centers; CapEx estimated at $500B over 5 years (40:43).
  • Insurance isn’t just about cyber risk—it covers construction, worker accidents, natural catastrophes.
  • The insurance industry is adapting: “A massive inflection point.”
• Major brokers (Aon, Marsh McLennan, AJ Gallagher, Willis Towers Watson, Brown & Brown) vying for market share.

AI & Targeted Advertising Transformation

Explosion in Ad Revenue

• Big Tech Ad Revenues (Q3 YoY):
  • Amazon: $17.7B (+24%)
  • Meta: $50B (+26%)
  • Alphabet: $74B (+13%)
• Netflix posts best quarter ever for ad sales.

AI's Role in Advertising

• Mark Douglas (Mountain):
  • AI has rapidly improved targeting—getting the right ad to the right consumer.
  • AI boosts creative output, lowering costs, enabling more tailored, high-ROI campaigns.

Notable Quote:

“If someone came to you and said, ‘Hey, give me a dollar and I’ll give you $3 back,’ when would you stop playing that game? That’s what advertising has become.”
—Mark Douglas, Mountain (45:07)

• Individualized TV ads for events like the Super Bowl are “not far away” (46:13).

Key Timestamps & Segments

• Big Tech, Amazon AI, Analyst Perspective: 00:40–10:13
• Apple’s Upgrade Cycle & AI Investments: 10:14–14:36
• SNAP Benefits Ending—Impact & Policy: 16:37–27:59
• Fed’s Interest Rate Debate: 31:23–33:17
• Retail Outlook & Consumer Health: 33:51–36:56
• Data Center Buildout & Insurance: 39:35–42:39
• AI-driven Ad Boom: 42:40–46:26

Memorable Quotes

• “The number one thing... everyone on the street was looking for was, ‘Will power reaccelerate?’ The answer was yes.”
  —Ron Josey, Citi (06:09)

• “If the funding does run out, it would be the first time in the program’s 60 plus year history…”
  —Emily Wilkins, CNBC (16:54)

• “If someone came to you and said, ‘Hey, give me a dollar and I’ll give you $3 back,’ when would you stop playing that game? That’s what advertising has become.”
  —Mark Douglas, Mountain (45:07)

Tone & Style

The episode mixes high-energy business analysis with urgent, grounded reporting on policy that hits millions of Americans. The hosts balance technical market commentary, real-world impact, and contemporary wit (including seasonal asides about Halloween).

For Listeners Who Missed the Episode

This is a fast-moving, info-packed episode. If you care about market movers, the AI race, or the real-life effects of Washington gridlock—especially as it hits the most vulnerable Americans—this discussion hits all the high notes. Expect deep reporting, memorable market insights, and concrete warnings about the economic “trickle-down” of shutdown politics.