Bearish
Amazon's Q3 earnings miss expectations; shares drop 6.5% after-hours.
Amazon's third-quarter earnings report revealed a significant decline in free cash flow, turning negative at $42.4 billion for the 12 months ending September 30, 2026, compared to a positive $14.8 billion a year earlier. This downturn is attributed to substantial investments in AI infrastructure. Additionally, revenue rose 12% to $201.9 billion, slightly below analyst estimates of $202.2 billion. The company's advertising growth also slowed to 12% year-over-year, down from 26% in the prior quarter. These factors contributed to a 6.5% decline in Amazon's shares during after-hours trading.
Key points
- Amazon's free cash flow turns negative at $42.4 billion due to heavy AI investments.
- Revenue increases by 12% to $201.9 billion, slightly missing analyst expectations.
- Advertising growth slows to 12% year-over-year, down from 26% in the previous quarter.
- AWS revenue grows 39.3% to $46 billion, marking the fastest growth in nearly five years.
Sources
- Amazon shares sink as it spends heavily on AIAxios · October 29, 2026
- Amazon offers cautious view after disappointing 3Q results but delivers strong cloud growthAssociated Press · October 29, 2026
- Charted: Hyperscaler cash grabAxios · October 29, 2026
- Is the GPU crisis down to real shortages, or is it market manipulation?TechRadar · October 23, 2026
AI-generated from public news sources. Not financial advice.
