Amazon: AWS grows 39%, shares fall after fourth-quarter forecast

Amazon's cloud business is accelerating, but investors were concerned by rising spending on AI infrastructure, negative cash flow and a cautious forecast for the holiday season.

Amazon published its results for the third quarter of 2026 on Thursday, October 29. Revenue rose 12.1% year on year to $201.94 billion. Net profit came in at $20.68 billion, compared with $21.19 billion a year earlier. After the release, the company's shares lost about 7% in after-hours trading. MamStartup writes about nearly 7%, while Money.pl and Parkiet report more than 7%.

Revenue and earnings per share ($1.89) were slightly below analysts' expectations. The revenue consensus stood at, according to ITwiz (opens in a new tab), citing FactSet, $202.2 billion, and according to Money.pl, $202.31 billion. The forecast for the fourth quarter is revenue of $240 billion to $247 billion. The midpoint of the range is below the $244.51 billion consensus reported by Reuters.

Amazon Web Services (AWS), the group's cloud segment, grew the fastest. Its revenue increased by 39.3% to $45.98 billion, versus forecasts of $45.29 billion. AWS operating profit rose from $11.43 billion to $17.77 billion. CEO Andy Jassy says that in 2027 and 2028 AWS revenue is expected to grow by more than 40% annually.

At the same time, capital expenditures are rising. Free cash flow (cash left after subtracting capital expenditures) for the last 12 months fell to negative $42.4 billion. A year earlier, it stood at positive $14.8 billion. According to MamStartup, quarterly capital spending reached $77.3 billion, more than twice as much as a year earlier. Amazon maintained its plan to allocate about $220 billion to investments in all of 2026, mainly in AI infrastructure.

For companies using the cloud, these results mean that AWS remains Amazon's biggest source of operating profit, and the group is not signaling any slowdown in the expansion of its data centers.