Amazon stock falls after earnings miss despite 39% AWS growth

Amazon stock falls earnings was the market’s verdict after the company reported third-quarter results on Oct. 29 that missed Wall Street expectations on revenue and per-share earnings. Shares fell as much as 7% in extended trading, Reuters reported, as strong growth at Amazon Web Services was outweighed in investor attention by negative free cash flow, capital spending and a softer fourth-quarter revenue midpoint.

Amazon said net sales rose 12% from a year earlier to $201.9 billion in the quarter ended Sept. 30. Revenue was $201.94 billion on the more precise basis cited by SiliconANGLE, below the $202.31 billion analyst consensus. Net income was $20.7 billion, or $1.89 a diluted share, versus a $1.96 consensus estimate. Operating income rose to $28.1 billion.

The year-over-year decline in net income requires context. Amazon said the comparable 2025 quarter included $9.5 billion in pretax gains from its Anthropic investments. For readers comparing the company’s sales and profits, revenue and income are different measures, and Amazon reported gains in operating income even as net income was lower than a year earlier.

Why did Amazon stock fall after earnings despite AWS growth?

AWS was the strongest part of the report. Its sales increased 39% to $46 billion, ahead of an LSEG expectation for 38.2% growth to $45.61 billion, Reuters reported. Amazon said AWS operating income was $17.8 billion, up from $11.4 billion a year earlier.

But the results also showed the funding demands of Amazon’s infrastructure spending. The company reported a trailing-12-month free-cash-flow outflow of $42.4 billion, compared with a $14.8 billion inflow in the prior-year period. Amazon attributed the reversal primarily to a $94.8 billion year-over-year increase in net purchases of property and equipment, which it said primarily reflected AI investments.

• Third-quarter capital expenditure was $77.26 billion, about $20 billion above LSEG estimates, according to Reuters.
• Amazon expects $220 billion in capital expenditures during 2026.
• Chief Executive Andy Jassy told analysts that 2027 capital expenditure would be “meaningfully more” than 2026, Reuters reported.

Amazon’s forward revenue outlook added to the pressure. The company projected fourth-quarter revenue of $240 billion to $247 billion. The midpoint, $243.5 billion, was slightly below the $244.51 billion LSEG estimate cited by Reuters.

Reuters reported that analysts and investors focused on the free-cash-flow outflow, projected spending and the fourth-quarter outlook when assessing the share decline. The quarter therefore paired accelerating cloud sales with a more immediate question for the market: how much capital Amazon will deploy as it expands AI-related infrastructure, and when those investments will convert into cash generation.

This story draws on original reporting from SiliconANGLE.