Amazon Shares Fall About 6% Premarket After a Q3 Miss as Free Cash Flow Swings to a $42.4 Billion Outflow

Amazon shares fell in premarket trading on Friday, October 30, 2026, after the company reported third-quarter earnings and revenue that came in below Wall Street expectations and disclosed a widening free cash flow outflow tied to its spending on artificial intelligence infrastructure. The stock was at about $229 as of 7:05 a.m. ET, roughly 6% below Thursday's close of $243.79, according to Yahoo Finance data. It had fallen more than 6% in extended trading on Thursday, CNBC reported, and was down 7.1% in early premarket trading, Stocktwits reported.

Results versus estimates

Amazon earned $1.89 a share on revenue of $201.94 billion for the quarter ended September 30, compared with the $1.96 a share and $202.31 billion that analysts polled by LSEG had expected, according to CNBC. Net sales rose 12% from $180.2 billion a year earlier, or 13% excluding a $0.9 billion foreign exchange impact, the company said in its earnings release. Amazon said growth would have been about 400 basis points higher excluding the timing of Prime Day, which took place in the second quarter this year in most large countries after falling entirely in the third quarter in 2025.

Net income fell to $20.7 billion, or $1.89 a diluted share, from $21.2 billion, or $1.95 a share, a year earlier. The company attributed the decline mainly to $9.5 billion in pre-tax gains from its investments in Anthropic that were included in third-quarter 2025 results.

AWS accelerates, operating margin hits a record

Sales at Amazon Web Services increased 39.3% to $45.98 billion, which Amazon called its fastest growth in nearly five years, bringing the cloud unit to a $184 billion annualized revenue run rate. The figure topped the StreetAccount consensus of $45.29 billion, according to CNBC. AWS operating income rose to $17.8 billion from $11.4 billion.

Total operating income climbed to $28.1 billion from $17.4 billion, and the 13.9% operating margin was the highest in the company's history. Segment results included:

• North America sales up 6% to $112.9 billion, with operating income of $8.7 billion, compared with $4.8 billion a year earlier.
• International sales up 5% to $43.1 billion, or 8% excluding currency changes, with operating income of $1.6 billion, compared with $1.2 billion.
• Advertising revenue up 11% to $19.64 billion, below the StreetAccount estimate of $20.82 billion.
• Online stores sales up 2% to $68.47 billion, short of the $69.68 billion StreetAccount projection.

"Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 ($184 billion revenue run rate) and projected revenue growth rates of over 40% both in 2027 and in 2028," Chief Executive Andy Jassy said in the release.

Spending and cash flow

Free cash flow for the trailing twelve months swung to an outflow of $42.4 billion from an inflow of $14.8 billion a year earlier, driven primarily by a $94.8 billion year-over-year increase in purchases of property and equipment, which Amazon said mainly reflects investments in artificial intelligence. It was the second consecutive quarter of negative free cash flow; the prior quarter's figure was an outflow of $7.6 billion, according to CNBC. Operating cash flow rose 29% to $168.3 billion over the same twelve-month period.

Capital expenditures reached $77.3 billion in the quarter, up from $35.1 billion a year earlier and above the $58.7 billion analysts had estimated, according to FactSet data cited by CNBC. Amazon kept its forecast for 2026 cash capital expenditures at about $220 billion, and Jassy said on the conference call that the company expects to "spend meaningfully more in 2027." He also said Amazon plans to make its Trainium chips available externally "late in 2027."

Fourth-quarter outlook

For the holiday quarter, Amazon forecast net sales of $240.0 billion to $247.0 billion, representing growth of 12% to 16%, and operating income of $28.5 billion to $33.5 billion, compared with $25.0 billion a year earlier. The midpoint of the sales range was below the $244.5 billion analysts expected, according to LSEG data cited by CNBC. Amazon said it expects advertising revenue growth in the high teens in the fourth quarter.

The company also said it plans to hire more than 300,000 seasonal, part-time and full-time employees across its U.S. operations for the holiday season.

Amazon was among several large companies whose shares moved after Thursday's close; Intel, Reddit, Roblox and Twilio also fell sharply in extended trading after their reports, CNBC reported.