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Amazon Q3 Earnings: AWS Revenue Up 39%, AI Investment Drives Second Consecutive Quarter of Negative Free Cash Flow

Amazon released its third-quarter earnings report, with revenue of $201.94 billion and earnings per share of $1.89, both below market expectations, and its stock fell more than 7% at one point after hours. AWS revenue was $45.984 billion, up about 39% year-over-year, the fastest growth rate in nearly five years, with operating income of $17.773 billion. Because AI-related purchases of property and equipment rose to $77.26 billion, the company posted negative free cash flow for a second consecutive quarter, with an outflow of $42.4 billion over the past 12 months, and it maintained its capital expenditure forecast of $220 billion for this year.

Amazon Q3 Earnings: AWS Revenue Up 39.3%, AI Capital Expenditures Turn Free Cash Flow Negative

Amazon's net sales in Q3 2026 grew 12% year-over-year to $201.94 billion, slightly below expectations, while AWS net sales grew 39.3% year-over-year to $45.98 billion, the highest single-quarter growth rate in nearly five years. Purchases of property and equipment for the quarter reached $77.26 billion, about 1.2 times the year-ago period, and free cash flow swung from an inflow of $14.79 billion in the year-ago period to an outflow of $42.36 billion. The company maintained its full-year 2026 cash capital expenditure guidance of approximately $220 billion unchanged, and the stock fell as much as more than 10% in after-hours trading following the earnings release.

Amazon Earnings Call: AWS Expected to Grow Over 40% in 2027 and 2028, 2026 Capex Around $220 Billion

Amazon CEO Andy Jassy said on the Q3 earnings call that AWS third-quarter revenue grew 39.3% year over year to $45.98 billion, and is expected to grow over 40% in both 2027 and 2028, becoming a business with annual revenue exceeding one trillion dollars in the next 5 to 10 years. The company maintained its expectation of about $220 billion in cash capital expenditure for 2026, most of which will go to AWS, and expects spending to increase significantly in 2027. On Bedrock, spending by Fortune 500 companies grew nearly 7x year over year and total tokens grew nearly 17x, revenue commitments for Trainium and Graviton grew more than 20x year over year, and Trainium is planned to be sold externally by the end of 2027.

Amazon Q3 earnings revenue and profit miss expectations, AWS revenue up about 39% but AI investment leads to $42.4 billion cash outflow

Amazon's third-quarter revenue was $201.94 billion and earnings per share were $1.89, both below market expectations, with the after-hours stock price falling more than 7% at one point. AWS revenue was $45.984 billion, up about 39% year over year, the fastest growth in nearly five years, but free cash flow outflow over the past 12 months reached $42.4 billion, which the company said was mainly due to increased spending on AI-related property and equipment. Amazon maintained its forecast of about $220 billion in capital expenditure for 2026 and expects spending to increase significantly in 2027.

Amazon Earnings Call: AWS Quarterly Revenue of $46 Billion, Capital Expenditures to Continue Rising in 2027

Amazon's Q3 2026 earnings show AWS revenue of $46 billion, up 39.3% year over year, with $578 billion in backlog orders, and AI inference revenue accounting for more than half of AWS's AI revenue. Management expects AWS to grow at an annual rate above 40% in 2027-2028 and to approach $1 trillion in revenue within 5 to 10 years, but capital expenditures will be about $220 billion in 2026 and will rise significantly further in 2027, sending the company's shares down 7.3% after hours. The earnings call also mentioned that spending by Fortune 500 companies on Bedrock grew nearly 7x year over year, token call volume grew nearly 17x, and Trainium is planned to be sold externally by the end of 2027.

Jassy Says AWS Will Become a Trillion-Dollar Business, with About $220 Billion in Capital Expenditure in 2026

Amazon CEO Andy Jassy reiterated on the quarterly earnings call that AWS is expected to become a business with $1 trillion in annual revenue in the next 5 to 10 years, and he expects growth rates to exceed 40% in both 2027 and 2028. He said cash capital expenditure in 2026 will be about $220 billion, most of it going to AWS, and will increase significantly further in 2027; AWS revenue grew 39% year over year this quarter, with an annualized revenue scale of $184 billion. After the earnings release, Amazon's stock fell about 6% in after-hours trading.

Amazon's Q3 revenue grew 12%, AI infrastructure spending pushes free cash flow down to negative $4.24 billion

Amazon's third-quarter revenue grew 12% year-over-year to $201.9 billion, of which AWS revenue reached $46 billion, up 39% year-over-year, and operating profit grew 56% to $17.8 billion. To meet AI computing demand, capital expenditure over the past 12 months was $94.8 billion more than the same period last year, free cash flow fell to negative $42.4 billion, and the stock price fell about 8% after hours. Amazon expects fourth-quarter revenue between $240 billion and $247 billion, and CEO Andy Jassy said AWS growth of more than 40% will not appear until 2027 to 2028.

Amazon's AI spending turns free cash flow negative at $42.4 billion, shares fall after hours

Amazon disclosed that free cash flow for the trailing twelve months ended September 30, 2026 was negative $42.4 billion, compared with positive $14.8 billion in the same period of 2025; the company said this was mainly due to a $94.8 billion increase in purchases of property and equipment related to AI investments. Amazon expects cash capital expenditure of $220 billion for 2026, and AWS Chief Financial Officer John Felton said the order backlog as of the second quarter was close to $500 billion. In the earnings report, the advertising business's year-over-year growth rate fell to 12%, compared with 26% in the previous quarter.

Amazon's stock fell about 7% after its Q3 earnings report, showing AI investment pressure alongside Alphabet

Amazon's total Q3 revenue grew 12% year-over-year to $201.9 billion, below analyst expectations, and its stock fell about 7% after hours following the earnings release. AWS revenue grew 39% year-over-year to $46 billion, accelerating for the sixth consecutive quarter, but online retail growth slowed to 2% and advertising growth slowed to 11%; meanwhile, equipment and property expenditures exceeded $77 billion, and free cash flow over the past 12 months was negative $42.4 billion. This trend echoes Alphabet's single-day plunge of 13% after its search advertising revenue fell short of expectations, as market concerns grow that AI investment is suppressing cash flow and the pace of monetization.

Amazon CEO Jassy: AWS compute capacity essentially sold out through 2027, some orders locked in through 2028

Amazon CEO Andy Jassy said that driven by AI infrastructure demand, AWS's cloud computing capacity is essentially sold out through 2027, and a considerable portion of 2028 capacity has also been locked in advance. He noted that 2026 cloud compute capacity is fully booked, and that the company's announced 2026 capital expenditure plan is about $220 billion, adding that continuing to ramp up investment is not an inefficient use of funds. Jassy also said that some resources will be reserved for on-demand calls, the Bedrock inference service, and EC2.

Amazon CEO Jassy: AWS compute orders booked through 2028, enterprise AI adoption not yet widespread

In an a16z interview, Amazon CEO Andy Jassy said that even with roughly $220 billion in capital expenditure in 2026, AWS will still be unable to meet a large amount of customer demand: its main compute capacity for 2026 is already sold out, most of its 2027 capacity is booked, and a considerable portion of 2028 capacity has also received customer commitments. He described current AI demand as dumbbell-shaped—at one end are foundation model labs and a handful of fast-growing applications, and at the other are enterprises using AI to cut costs and improve efficiency—and said inference costs still need to fall substantially to drive widespread enterprise adoption. Jassy also mentioned that AWS Bedrock has integrated OpenAI models, and that both OpenAI and Anthropic have made multi-year, multi-gigawatt-scale commitments to use Trainium.

English translation is being prepared.

English translation is being prepared.

Anthropic Prepares for IPO: Prospectus Discloses Compute Commitments and Security Risks

Anthropic is preparing for an IPO, with a valuation estimated at up to $2 trillion, and the prospectus published this Monday disclosed details on security, customer dependence, and corporate governance. In the first nine months of 2026, about 5% to 7% of revenue came from customers found to have violated usage policies; the top five customers contributed about 25% of revenue, and in the first half of 2026, 48% of revenue was obtained through platforms such as AWS, Google Cloud, and Microsoft Azure. Existing and planned AI infrastructure agreements total about $657 billion, of which about $417 billion is non-cancelable, and spending could rise to $806 billion after including hardware capacity still under negotiation. After listing, the seven founders will collectively control 50.1% of ordinary shareholder voting rights. The specific listing date has not yet been determined; according to The Wall Street Journal, the target is the week of November 16.

Large numbers of Amazon NVIDIA GB300 servers temporarily idle due to insufficient power supply

Amazon AWS at one point expected to receive NVIDIA GB300 server racks worth about $5 billion, but after some equipment was delivered, it was temporarily stored in warehouses or transit facilities because data centers lacked sufficient power capacity; the industry calls such equipment dark GPUs. AWS also plans to continue purchasing at a rate of about $3 billion per month, and has shifted to accepting racks early and paying early to lock in scarce hardware. Amazon plans to invest about $220 billion in capital expenditure this year for AI and cloud computing infrastructure, and free cash flow has turned negative for the first time in recent years.

Amazon stockpiles NVIDIA GB300 servers but has no power to run them, exposing the power bottleneck of AI infrastructure

According to internal emails seen by Business Insider, Amazon receives NVIDIA server racks worth billions of dollars each month; in August alone AWS expects to receive about $5 billion worth of GB300 racks, and thereafter about $3 billion more each month, but some US AWS sites lack sufficient power, so this hardware can only be temporarily stored in transit warehouses. This phenomenon, known as dark GPUs, is putting financial pressure on data centers; Amazon's free cash flow turned negative in the second quarter for the first time since 2023, and capital expenditure this year is expected to be about $220 billion.

PyTorch Conference 2026 held in San Jose, announces progress on TorchTPU and TorchNeuron

PyTorch Conference North America 2026 was held on October 20–21 in San Jose, attracting more than 3,500 attendees and focusing on accelerating open intelligence and projects including PyTorch, vLLM, DeepSpeed, Ray, Helion, and Safetensors. The event announced TorchTPU, a native PyTorch TPU backend developed in collaboration between Google and Meta, as well as TorchNeuron, a native backend for AWS Trainium, which entered public testing under Apache 2.0 on October 20. Shopify shared a case study of building a continuous learning loop with PyTorch and vLLM, saying it compresses production failures into model weights every day and has reduced serving costs by 96%.

OpenAI and Google Reach AI Distribution Agreement; GPT-6 Astra and Codex to Launch on Google…

OpenAI and Google have reached an AI distribution agreement. Within weeks, OpenAI will list GPT-6 Astra and Codex on Google Cloud's Model Garden, extending its model coverage to all three major U.S. clouds. Customers can purchase these models through Google Cloud Marketplace and count the spending toward their committed cloud consumption quotas, eliminating a separate procurement process; regulated customers can also run agent workflows built with OpenAI models within Google Cloud's access control and data governance tools. The agreement only became possible after April 27, 2026, when Microsoft's license to OpenAI technology became non-exclusive and Microsoft stopped paying OpenAI a revenue share on Azure resales; AWS had previously been first to launch Codex on Bedrock.

WSJ sees Anthropic IPO draft: half-year revenue $16.3 billion, compute commitments about $450 billion

The Anthropic IPO draft seen by WSJ shows half-year revenue of $16.3 billion, a book loss of $80.7 billion, and compute commitments of about $450 billion. The draft discloses fixed payments of $252 billion to three major cloud providers over the next 7 to 10 years, including $111 billion to Google, $110 billion to AWS, and $31 billion to Microsoft, payable whether or not used. There is also over $160 billion in Google chip leasing (via Broadcom) and up to $86 billion in Nvidia GPU rental, plus $150 billion in deals under negotiation.

English translation is being prepared.