The quarter in numbers
Amazon came up short on both profit and sales. Earnings per share landed at $1.89 against an LSEG consensus of $1.96, while revenue reached $201.94 billion versus a $202.31 billion estimate.
Under the hood, cloud and ads moved in different directions. Amazon Web Services generated $45.98 billion, topping StreetAccount's $45.29 billion view. Advertising brought in $19.64 billion, trailing the $20.82 billion figure tracked by StreetAccount.
Cash flow and capex
Amazon reported negative free cash flow for a second consecutive quarter. Over the past 12 months, cash outflow totaled $42.4 billion, up 386% year over year, after a free cash outflow of $7.6 billion in the prior quarter. The company said the shortfall largely reflects heavier purchases of property and equipment tied to AI investments.
Management kept its 2026 capital spending outlook unchanged and said it still expects outlays to reach $220 billion this year. Across Big Tech, there are hints the recent capex surge is cooling: Microsoft cut its annual capex outlook, reducing it from $175 billion to $170 billion, and Alphabet kept its target range steady at $195 billion to $205 billion.
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What this means for your portfolio
Looking ahead, Amazon projects fourth quarter revenue between $240 billion and $247 billion, which lines up with the $244.51 billion consensus from LSEG. The company is leaning into AI-related infrastructure, which is weighing on cash flow now while it builds capacity for future demand.
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