How would an MMO deal with calculating and sending packets for thousands of players every tick for a live action game?

I am working on a game and I am thinking about getting into networking. I have been programming for about 5 years and got into game development the last 2 years. I am 15 years old so I only really learn online and from books on my own time. I am planning to make a java server for Amazon AWS EC2, but I am just wondering how MMO's handle multiple players each tick.

Is it just the sheer power of servers? I am not looking for code or anything, just in general how the servers work.

Does the server just do all of the calculations for all of the players and the tens or hundreds of thousands of objects and then send and receive thousands of packets every tick? It just seems like a lot for a single computer to handle, but it is indeed a server.

Thanks.