The American corporation Amazon sharply increased investments in artificial intelligence infrastructure, but its financial results for the third quarter of 2026 turned out to be slightly worse than Wall Street's expectations. Despite the rapid growth of the AWS cloud business and record operating profit, the company's shares lost more than 7% in after-hours trading.
This is evidenced by Amazon's financial report, published on October 29. Investor reaction was reported by Quartz and Yahoo Finance.
In the third quarter, Amazon spent $77.3 billion on the acquisition of fixed assets and equipment, up from $35.1 billion in the same period last year. Thus, spending under this item more than doubled.
A significant portion of the funds is directed at building data centers, purchasing computing equipment, and expanding Amazon Web Services (AWS) infrastructure needed for cloud services and artificial intelligence.
Amazon's total capital expenditures in 2026, according to the company's current forecast, are expected to be about $220 billion. Management earlier raised the plan from $200 billion, citing increased demand for computing power and higher component costs, particularly memory chips.
Large-scale investments are already putting significant pressure on the company's cash flows. For the 12 months ended September 30, Amazon's free cash flow was minus $42.4 billion. A year earlier, this figure was positive at $14.8 billion.
Amazon explained the deterioration mainly by the increase in capital expenditures related to the development of artificial intelligence.
AWS showed its fastest growth in almost five years
The main positive result of the quarter was the acceleration of growth in the Amazon Web Services cloud division.
AWS revenue increased by 39.3% year-over-year to $46 billion. This is the highest growth rate of Amazon's cloud business in almost five years.
The division's operating profit rose from $11.4 billion to $17.8 billion. Thus, AWS accounted for more than half of the corporation's total operating profit.
Amazon CEO Andy Jassy said that investments in AWS infrastructure are paying off and the company expects cloud services to continue growing at a high rate in the coming years.
According to management forecasts, AWS revenue could increase by more than 40% annually in 2027 and 2028. However, these estimates depend on continued demand for cloud computing and infrastructure development.
Amazon is actively expanding computing capacity amid growing demand from artificial intelligence developers and large corporate clients. The company is also developing its own AI services and provides infrastructure for third-party models.
Financial results did not meet expectations
Despite AWS's success, Amazon's total revenue for the third quarter was $201.9 billion, up 12% compared to the same period in 2025.
Analysts on average expected about $202.3 billion.
Net income decreased from $21.2 billion to $20.7 billion, and earnings per share came to $1.89 versus approximately $1.97 forecast.
At the same time, Amazon's operating profit grew to a record $28.1 billion compared to $17.4 billion a year earlier. Operating margin reached 13.9%—the highest level in the company's history.
Revenue from the North American business increased by 6% to $112.9 billion, and international revenue grew by 5% to $43.1 billion. Advertising services revenue reached $19.6 billion.
Amazon attributed part of the slowdown in sales growth to changes in the timing of Prime Day. Last year the major sale took place in the third quarter, while in 2026 it was moved to the second quarter in most major countries.
Investors fear rising spending by tech giants
For the fourth quarter, Amazon forecasts revenue in the range of $240–247 billion and operating profit from $28.5 billion to $33.5 billion.
The midpoint of its sales forecast was slightly below analyst expectations. This, combined with third-quarter results and the scale of capital expenditures, intensified the negative reaction of investors.
After the earnings release, Amazon shares fell more than 7% in after-hours trading in the US. This is a preliminary market reaction, which may change after the opening of the next regular trading session.
Investors are increasingly assessing the ability of the largest technology companies to convert multi-billion-dollar investments in artificial intelligence into sustainable growth in profits and cash flows.
The day before, similar concerns arose after the financial results of Alphabet, Google's parent company, were published. Despite the development of its cloud business, investors were concerned about high spending on AI and deterioration in certain financial indicators.
Thus, Amazon's report demonstrated two simultaneous trends: demand for cloud infrastructure for artificial intelligence continues to grow rapidly, but building it requires ever-larger financial commitments.
