Shares were trading around $629 while people thought about the chance of lowered costs and the continuing plans to invest in AI. The stock is down 7% so far this year, after going up almost 13% in 2025, and this shows people aren’t sure about growth and how much profit the company will make. People who trade and experts in the field saw the increase in share price as a response to possible ways of working better that could really improve earnings. Markets usually like it when businesses firmly control costs and also invest a lot in tech for the future.
If the company went through with a 20% reduction, it would be the biggest since a 2022-2023 restructuring – called “the year of efficiency” – which got rid of about 21,000 jobs. The company had roughly 79,000 workers at the end of the year. A cut of 20% could mean nearly 16,000 jobs lost, and maybe $6 billion in savings. Experts guess savings like that could raise core adjusted earnings by around 5%, depending on how much has to be paid out in severance and to do the restructuring.
The company has been increasing investment
The company has been increasing investment after falling behind other companies in AI development, building data centres and getting new people with the right skills. It is expecting to spend as much as $135 billion in 2026 – about twice what it spent last year – to get the cloud ability it needs to train large models. These investments include promises of several billion dollars to outside cloud companies, showing a mixed approach to capacity and speed. The aim is to support the next generation of AI models and the structure needed to run them on a large scale.
A lot of spending has made advertising tools better and helped increase sales, but the company hasn’t yet come up with an AI model that really competes with the best in the field. A model made by the company itself, given the code name Avocado, is said to have not met some of the standards for how well it would work. Companies in the industry are still setting a high level, and when products will be ready remains a main concern for investors. Being able to turn AI advances into user features that are different and can be turned into money will decide where the company stands in competition.
Some experts say the cuts could be only the beginning.
Barton Crockett, an analyst at Rosenblatt Securities, pointed to the possibility of more cuts if AI proves to be very productive, saying that increases in efficiency might change how many people are needed in all the teams. At the same time, the company said the reports were just guesswork and theory, making it clear that there’s no confirmed plan at this point. What management says to the public shows that decisions will depend on both how well the tech does and what the business needs. Layoffs linked to AI have been going up around the world, with tens of thousands of jobs tied to automation or changes in AI in recent months. People watching the situation warn that some companies might be using AI as a good reason for cuts that were already planned for other reasons. Mark Shmulik, an analyst at Bernstein, warned that markets will see through companies using AI to hide cuts that would have happened anyway. But for established companies with big investments in engineering and structure, AI can offer a real way to make things more efficient if the models and systems do what they are meant to.
In conclusion, the stock going up again shows that investors want to see firm action to pay for the large amounts of money being put into AI, but there is still a large risk of things not going as planned. The company’s next moves on layoffs, how well the models do, and where it puts its money will be closely watched by markets, workers, and companies it competes with.
