As of 9:35 AM IST, Friday 30 October 2026. Amazon reported after the US close on Thursday 29 October; extended-trading moves are indicative and can change at the next open.
Amazon's cloud business had its fastest growth in nearly five years in the third quarter, but the company missed Wall Street on revenue and profit, posted a second straight quarter of negative trailing free cash flow and warned it will spend "meaningfully more" in 2027. The shares fell more than 6% in extended trading, CNBC reported.
The numbers against estimates
| Metric | Q3 2026 | Estimate |
|---|---|---|
| Revenue | $201.94 billion (+12%) | $202.31 billion |
| Earnings per share | $1.89 | $1.96 (LSEG) |
| AWS revenue | $45.98 billion (+39.3%) | $45.29 billion |
| Advertising revenue | $19.64 billion (+11%) | $20.82 billion |
| Online stores revenue | $68.47 billion (+2%) | $69.68 billion |
| Capital expenditure | $77.3 billion | $58.7 billion (FactSet) |
Net income was $20.69 billion, down from $21.19 billion a year earlier, when results were boosted by a $9.5 billion gain on Amazon's stake in Anthropic. Operating income was $28.1 billion, a 13.9% margin. Online stores and advertising growth were held back partly because Prime Day moved into the second quarter this year, CNBC noted.
AWS: the bright spot
AWS grew 39.3%, its fastest pace in nearly five years, and is now on a run rate of about $184 billion a year. AWS operating income was $17.8 billion. CEO Andy Jassy said he expects AWS growth of "over 40%" in 2027 and 2028, and that Amazon's in-house chips business is growing at triple-digit rates, with Trainium chips due to be available to outside customers late in 2027. "There has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years," Jassy said.
The cash problem
- Free cash flow: negative $42.4 billion over the trailing twelve months, the second negative reading in a row (it was negative $7.6 billion the quarter before).
- Capex: $77.3 billion in the quarter, more than double the $35.1 billion a year earlier and well above the $58.7 billion FactSet estimate. Amazon kept its 2026 capex plan at about $220 billion.
- 2027: Jassy said Amazon expects to "spend meaningfully more in 2027."
Guidance
Amazon guided fourth-quarter revenue to $240 billion to $247 billion, with the midpoint below the roughly $244.5 billion consensus, and operating income to $28.5 billion to $33.5 billion.
A rough night for Big Tech
The report lands in a week when investors have been questioning whether huge AI budgets will pay off. Microsoft trimmed its capex forecast to $170 billion from $175 billion, while Alphabet kept its $195 billion to $205 billion range and showed negative cash flow. Intel, which also reported on Thursday, beat on the quarter but guided fourth-quarter revenue to about $15.5 billion against expectations near $17 billion; its shares fell sharply after hours, by around 18% to more than 20% depending on the report. The selling spilled into Asian chip stocks on Friday morning.
Disclaimer: This article is for information only and is not financial or investment advice. After-hours prices can differ from the next session's trading.
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