The key facts

  • Amazon's Q3 revenue — $201.9 billion, earnings per share — $1.89: both figures below FactSet consensus forecasts
  • AWS grew 39% year over year to $45.98 billion, with division operating profit of $17.8 billion
  • Free cash flow over 12 months — minus $42.4 billion versus plus $14.8 billion a year earlier; 2026 capex — about $220 billion

A quarter with one bright spot

Amazon released its third-quarter 2026 report, which fell short of analysts' expectations on two key metrics at once. Revenue grew 12% to $201.9 billion versus a forecast of $202.2 billion, and diluted earnings per share came in at $1.89 against an expected $1.97 — figures are given per the FactSet consensus cited by TechCrunch and AFP. The company's shares fell more than 7% in after-hours trading on Thursday, AFP reports.

AWS is accelerating, but the company is spending more than it earns

The main positive in the report was the cloud division AWS: its revenue reached $45.98 billion against expectations of $45.29 billion, with growth of 39% year over year. AWS operating profit rose to $17.8 billion from $11.4 billion in the third quarter of 2025. Meanwhile, advertising services revenue fell short of forecasts — $19.6 billion versus $20.8 billion.

The price of the AI race: negative cash flow

The most alarming metric for investors was free cash flow: over the last 12 months it came to minus $42.4 billion — the company spent significantly more than it generated. A year earlier, as of September 30, 2025, the figure was positive at $14.8 billion. Amazon attributes this to AI investments and confirmed that it still expects capital expenditures of about $220 billion for 2026. For scale: the fourth-quarter revenue forecast is $240–247 billion, meaning annual capex is nearly equal to the sales of the holiday quarter alone.

Context: a sector under pressure

Amazon's share decline came amid general investor nervousness about the payback of AI spending: the day before, Alphabet shares plunged more than 10% after weak earnings, and Intel lost 20% on a forecast of a prolonged downturn in the PC market, AFP lists. According to Bloomberg data cited by the agency, the global AI debt of technology companies reached $335 billion this year; Microsoft recently raised $25 billion through bonds, and Meta announced a new share issuance.

Betting on AWS, Trainium and business beyond e-commerce

CEO Andy Jassy said that 'there has never been a trillion-dollar-revenue business, and we may have two of them in the next 5–10 years' — referring, in the context of the statement, to the cloud and other areas. Amazon also emphasizes segments beyond e-commerce: Whole Foods products, healthcare and pharmacies, the Leo satellite internet, and Zoox self-driving cars. Demand for its own Trainium chips is 'strong,' according to Jassy, and the company intends to make them more widely available by the end of next year. Back in July, Amazon reported that the AI lines of the cloud business and chips had each exceeded $25 billion on an annualized basis with 'triple-digit' growth.