Amazon Shares Plunge After Q3 Earnings Miss and High Cash Burn
Amazon shares fell as much as 12.5% after the company reported a Q3 earnings miss and a $33.5 billion free cash flow deficit.
Shares of Amazon.com fell as much as 12.5% in after-hours trading on October 29, 2026, following third-quarter earnings that missed Wall Street expectations. The company reported revenue of $201.94 billion and earnings per share of $1.89, falling short of analyst estimates of $202.26 billion and $1.96, respectively. The miss was attributed in part to the absence of a $9.5 billion pre-tax gain from Anthropic investments recorded in the previous year.
Financial results were marked by massive cash burn, with a free cash flow deficit of $33.5 billion for the quarter. This was driven by capital expenditures that surged 43% to $77.3 billion to support AI infrastructure, leading Amazon to raise $48.1 billion in new long-term debt. The company maintained its 2026 annual capital spending forecast at approximately $220 billion but provided fourth-quarter revenue guidance between $240 billion and $247 billion, which largely fell below consensus estimates.
Despite the retail headwinds and cash outflows, Amazon Web Services (AWS) grew 39% to $45.98 billion, its fastest growth pace in nearly five years. AWS operating income rose 55% to $17.77 billion, and the unit secured new deals with Meta and OpenAI. CEO Andy Jassy projected that AWS could grow north of 40% in 2027 and 2028, potentially becoming a trillion-dollar revenue business within the next five to 10 years. Additionally, AWS plans to make its Trainium chips available outside of its own cloud platform in late 2027.
