Amazon missed Wall Street’s third-quarter revenue and earnings estimates on October 29, even though AWS revenue rose 39% and heavy AI spending led to $42.4 billion in negative free cash flow over the past 12 months.
Net sales rose 12% from a year earlier to $201.9 billion, slightly below the $202.31 billion estimate. Diluted earnings per share were $1.89, also below the $1.96 forecast. AWS revenue reached $45.98 billion, above estimates.
Amazon said the unit’s growth was its fastest in nearly five years. Amazon’s operating income increased to $28.1 billion from $17.4 billion a year earlier, with AWS accounting for $17.8 billion. The cash-flow figure covers the 12 months through September 30, not the quarter alone.
Amazon said the decline mainly reflected increased spending on property and equipment, mostly for AI. Amazon’s investment in property and equipment totaled $77.3 billion for the quarter, more than double the year-earlier amount. Amazon kept its 2026 spending forecast at about $220 billion.
For the holiday quarter, the company forecast sales of $240 billion to $247 billion. The midpoint of that range was below analysts’ expectations. Shares fell more than 6% in after-hours trading following the results, as investors considered fast cloud growth alongside the cost of Amazon’s investment plans.