Amazon reports strong Q3 growth but stock slides as AI spending drives free cash flow negative
Amazon posted third‑quarter revenue of $201.9 billion, up 12% year over year, and net income of $20.7 billion. AWS revenue jumped 39% to $46 billion, with operating income of $17.8 billion. However, the company’s free cash flow turned negative by $42.4 billion due to $94.8 billion of AI‑related capital spending, and it projects total capital expenditures of about $220 billion for 2026. The market reacted with a 6.5% drop in Amazon’s share price.
Why it matters
The negative free cash flow signals short‑term cash pressure despite operating profitability, so investors must monitor whether the AI‑driven capex translates into future cash generation. The stock decline reflects market concern over the scale of the investment and its return prospects.
Key facts
- 1Third‑quarter revenue was $201.9 billion, a 12% increase year over year. 929thebull.com
- 2Net income for the quarter was $20.7 billion. 929thebull.com
- 3Free cash flow was negative $42.4 billion, compared with a positive $14.8 billion a year earlier. finance.yahoo.com
- 4Amazon expects total capital expenditures of approximately $220 billion in 2026. finance.yahoo.com
- 5AWS revenue grew 39% year over year to $46 billion. finance.yahoo.com
- 6AWS operating income rose to $17.8 billion, up from $11.4 billion a year earlier. finance.yahoo.com
Summary written by AlphAI AI Desk from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.