Amazon completed the big-tech earnings trilogy on Thursday, October 29 — and like Alphabet the night before, it disappointed Wall Street despite a booming cloud business. Amazon reported third-quarter revenue of $201.94 billion and earnings per share of $1.89, both below analyst estimates, and shares fell about 7 percent in after-hours trading.
The short answer is the same one investors gave Microsoft and Alphabet this week, only sharper: cloud demand is not the question anymore. Cash is. Amazon’s AWS business grew at its fastest pace in nearly five years, yet the company still burned through tens of billions of dollars building the data centers to serve that demand.
The miss, in numbers
Revenue of $201.94 billion missed the roughly $202.31 billion analysts expected, according to LSEG data cited by Reuters, while earnings per share of $1.89 missed the roughly $1.96 expected. Net income fell to $20.7 billion from $21.2 billion a year earlier — a decline Amazon attributed mainly to a $9.5 billion pre-tax gain on its Anthropic investment that had boosted the year-earlier quarter, according to Unite.AI’s summary of the release.
Advertising revenue of $19.64 billion also came in below the $20.82 billion expected, according to CNBC TV18’s report. Amazon shares had already fallen 4.5 percent in regular trading on Thursday before the results, then dropped about 7 percent further after hours to around $226, according to the same report.
AWS: the bright spot that was not enough
Amazon Web Services was genuinely strong. AWS revenue rose 39.3 percent year over year to $46.0 billion, ahead of the roughly $45.6 billion expected, and AWS operating income climbed to $17.8 billion from $11.4 billion a year earlier. Amazon described it as the segment’s fastest growth in nearly five years, bringing AWS to a $184 billion annualised revenue run rate, according to the company’s release.
The spending that spooked the market
Amazon spent $77.3 billion on capital expenditure in the quarter, well above analyst expectations of about $58.7 billion, according to CNBC TV18, and it kept its full-year capital spending forecast at about $220 billion. On a trailing twelve-month basis, free cash flow swung to a negative $42.4 billion, compared with a positive $14.8 billion a year earlier, according to Amazon’s release as summarised by Unite.AI.
For the fourth quarter, Amazon guided revenue of $240 billion to $247 billion — a midpoint of $243.5 billion, below the roughly $244.51 billion analysts expected — with operating income of $28.5 billion to $33.5 billion.
The pattern across all three giants
Microsoft beat expectations and kept positive free cash flow, and its shares rose. Alphabet missed, burned cash, and its shares fell more than 12 percent on Thursday. Amazon missed, burned far more cash, and its shares fell too.
Key takeaways
- Amazon Q3: revenue $201.94 billion (miss vs. ~$202.31 billion expected), EPS $1.89 (miss vs. ~$1.96), net income $20.7 billion (down from $21.2 billion).
- AWS: revenue $46.0 billion, up 39.3 percent — fastest growth in nearly five years; operating income $17.8 billion, up from $11.4 billion.
- Advertising: $19.64 billion, below the $20.82 billion expected.
- Capital spending: $77.3 billion in Q3; full-year 2026 forecast held at about $220 billion.
- Free cash flow (trailing 12 months): negative $42.4 billion, vs. positive $14.8 billion a year earlier.
- Q4 guidance: revenue $240-247 billion, midpoint below expectations; shares fell about 7 percent after hours.
Bottom line: AWS is accelerating, but Amazon is paying a record price for that acceleration — and this week, the market charged it for the bill.
