Amazon Q3 Narrowly Misses on Sales and EPS as AWS Accelerates to 39%, Shares Slip After Hours

AMZN reported third-quarter 2026 net sales of $201.9 billion after the close on October 29, up 12% from $180.2 billion a year earlier and a hair under the roughly $202.3 billion consensus. Diluted EPS was $1.89 against a $1.97 estimate, down from $1.95 a year ago. Shares fell about 6% in after-hours trading on the print, on top of a 4.2% decline in the regular session before the report.

The headline miss sits on top of a much stronger cloud quarter. AWS sales rose 39% to $46.0 billion, ahead of the $45.7 billion estimate and the segment's fastest growth in nearly five years, while AWS operating income climbed to $17.8 billion from $11.4 billion a year earlier, according to the company's earnings release. Total operating income of $28.1 billion beat the $26.1 billion estimate for a 13.9% operating margin, and CEO Andy Jassy said Amazon is projecting AWS "revenue growth rates of over 40% both in 2027 and in 2028." Advertising ($19.6 billion vs. $20.9 billion expected) and online stores ($68.5 billion vs. $69.6 billion) came in light.

Spending is the sticking point. Purchases of property and equipment reached $77.3 billion in the quarter, more than double the $35.1 billion of a year earlier and well above the roughly $58.8 billion analysts expected, though Amazon kept its full-year 2026 capex guide at about $220 billion. Fourth-quarter guidance was also soft: net sales of $240 billion to $247 billion against a $244.5 billion consensus, and operating income of $28.5 billion to $33.5 billion against about $33.0 billion expected.

What to watch: whether the third-quarter capex surge is spending pulled forward or a sign of upside to the $220 billion plan, whether AWS holds the 40%-plus growth management is projecting, and whether the advertising shortfall proves a one-quarter blip. The results land a day after MSFT and GOOGL reported, so the AI infrastructure spending debate now has all three hyperscalers' numbers on the table.