Amazon's third-quarter revenue and profit miss estimates as AI spending pushes free cash flow to minus $42.4 billion
Amazon reported third-quarter revenue of $201.9 billion, up 12%, and earnings of $1.89 a share, both slightly below analysts' estimates. Amazon Web Services revenue rose 39% to $46 billion, and the company held its 2026 capital spending forecast at $220 billion.
Amazon reported third-quarter results on Thursday 29 October that came in slightly below analysts’ estimates. Revenue rose 12% from a year earlier to $201.94 billion, against $202.31 billion expected, and earnings were $1.89 a share, against $1.96 expected, according to LSEG data cited by CNBC.
Net income was $20.69 billion, down from $21.19 billion a year earlier. Amazon said the fall was mainly because the year-earlier quarter included a $9.5 billion pre-tax gain on its investment in AI company Anthropic, CNBC reported.
Revenue at Amazon Web Services, its cloud unit, rose 39% to $45.98 billion, above the StreetAccount estimate of $45.29 billion. Advertising revenue rose 11% to $19.64 billion and online store sales rose 2% to $68.47 billion, both below estimates.
Free cash flow for the 12 months to September was an outflow of $42.4 billion, which Amazon said was mainly due to higher spending on property and equipment for AI. Capital expenditure in the quarter was $77.3 billion, up from $35.1 billion a year earlier. Amazon kept its 2026 capital spending forecast at $220 billion and forecast fourth-quarter revenue of $240 billion to $247 billion.
Chief executive Andy Jassy said he expects AWS revenue growth of “over 40%” in 2027 and 2028, and that the company expects to “spend meaningfully more in 2027.”
Amazon shares were down 1.7% at $239.68 as of 17:52 GMT on Friday, after falling as much as 6% earlier in the session, according to Yahoo Finance data and Investopedia.
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