Amazon shares plunged more than 7% in extended trading Thursday after the company reported earnings and revenue for the third quarter that fell short of Wall Street's expectations.
Here's how the company did, compared with estimates from analysts polled by LSEG:
Wall Street was also looking at other key revenue numbers:
The company held steady on its capital expenditure forecast for 2026, saying it continues to expect spending will reach $220 billion this year.
Tech's hyperscalers have been on a blistering spending run to meet the surge in demand for artificial intelligence infrastructure, but signs have begun to emerge that the capex splurge is moderating. Earlier this week, Microsoft lowered its capex forecast for the year to $170 billion from $175 billion, while Alphabet maintained its guidance at $195 billion to $205 billion.
The aggressive AI spending has eaten into Amazon's cash flow. The company posted negative free cash flow for the second consecutive quarter, recording an outflow of $42.4 billion for the trailing twelve month period, an increase of 386% year over year. In the prior quarter, the company reported negative free cash flow of $7.6 billion.
The company said the shortfall was primarily due to an increase in purchases of property and equipment as a result of AI investments.
For the fourth quarter, Amazon expects revenue to be in the range of $240 billion and $247 billion, in line with consensus estimates of $244.5 billion, according to LSEG. The fourth quarter is typically one of Amazon's biggest by revenue, due to the peak holiday shopping season.
Sales in Amazon's cloud segment soared 39% year over year to $45.98 billion. That topped Wall Street's forecast for $45.29 billion and growth of 38%, according to StreetAccount.
CEO Andy Jassy highlighted AWS' breakneck growth in the earnings release, saying the company expects revenue growth rates of "over 40%" next year and in 2028. He added, "Our AWS investment in functionality and infrastructure is working."
Third-quarter net income came in at $20.69 billion, or $1.89 per share, vs. $21.19 billion, or $1.95 per share, a year ago. The company said the decrease was driven primarily by a $9.5 billion pre-tax gain from its investment in the AI startup Anthropic, which was recorded in the 2025 third quarter.
While the AWS segment continues to hum along, results weren't as bright in Amazon's retail business, which remains its largest unit by revenue. Online sales gained 2% year over year to $68.47 billion, which fell short of analysts' projected $69.68 billion, according to StreetAccount.
Advertising revenue of $19.64 billion also missed StreetAccount consensus estimates of $20.82 billion.
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