Amazon Q3 2026 earnings missed Wall Street expectations for revenue and earnings per share. Its cloud business grew rapidly, but heavy artificial intelligence investments pushed free cash flow into negative territory.
According to Amazon’s third-quarter financial results, net sales rose 12% to $201.9 billion. That was slightly below the $202.2 billion analysts expected, according to FactSet.
Diluted earnings came in at $1.89 per share, missing analysts’ $1.97 estimate. Amazon also reported $20.7 billion in net income, compared with $21.2 billion a year earlier.
Amazon Q3 2026 Earnings Show Strong AWS Growth
Amazon Web Services (AWS) generated $45.98 billion in quarterly revenue, beating analysts’ estimate of $45.29 billion. Sales increased 39% year over year, marking the cloud division’s fastest growth in nearly five years.
AWS operating income climbed to $17.8 billion from $11.4 billion in the third quarter of 2025. Strong demand for cloud infrastructure and AI services supported the growth.
Amazon has continued expanding its computing infrastructure to support increasing demand. The company recently announced a $2 billion-plus agreement with Verizon focused on cloud and AI connectivity.
AI Infrastructure Spending Pushes Free Cash Flow Negative
Despite strong AWS performance, Amazon reported negative free cash flow of $42.4 billion for the trailing 12 months. That compares with positive free cash flow of $14.8 billion in the previous comparable period.
Amazon attributed the decline primarily to increased purchases of property and equipment, including AI infrastructure. The company continues expanding computing capacity to meet customer demand.
Amazon maintained its forecast of approximately $220 billion in cash capital expenditures for 2026. That amount is close to its projected revenue for the upcoming holiday quarter alone.
Amazon Forecasts Up to $247 Billion in Holiday Quarter Sales
Amazon expects fourth-quarter net sales between $240 billion and $247 billion. The forecast represents projected year-over-year growth of approximately 12% to 16%.
The outlook highlights the scale of Amazon’s infrastructure investments. While AWS continues to grow rapidly, AI spending remains a significant pressure on the company’s cash flow.
