Amazon's cloud business is growing faster, but the bill for AI data centers is now bigger than the cash the company brings in, and investors noticed.
Why did Amazon stock fall after earnings?
Amazon (AMZN) reported third-quarter earnings of $1.89 a share on Thursday, Oct. 29, 2026, below analyst estimates of roughly $1.96 to $2.01. Sales of $201.9 billion were just shy of forecasts. Free cash flow over the past year swung to a $42.4 billion outflow, and the stock fell about 7% after hours.
The numbers come from Amazon's third-quarter earnings release, published just after the 4 p.m. Eastern close. Analyst estimates come from Shacknews and 24/7 Wall St., which put revenue expectations at about $202.1 billion to $202.2 billion.
The after-hours drop moved around through the evening. According to StockTitan, Amazon was 6.72% lower at 4:25 p.m. ET and ended the after-hours session 7.30% below its regular close at its last trade before 8 p.m. ET. Yahoo Finance reported that the stock briefly fell as much as 10% before trimming losses. After-hours prices can change again once regular trading opens on Friday.
What went right in the quarter?
The headline business numbers were strong. Net sales rose 12%, or 13% if you strip out currency swings. Amazon said growth would have been about 4 percentage points higher if Prime Day had not moved. The shopping event fell in the second quarter in most large countries this year, after landing entirely in the third quarter in 2025.
Amazon Web Services (AWS), the cloud computing unit that rents servers and AI tools to other companies, grew 39% to $46.0 billion. Its operating income, the profit from day-to-day operations before interest and taxes, jumped to $17.8 billion from $11.4 billion a year earlier. Company-wide operating income rose to $28.1 billion from $17.4 billion, and Amazon called its 13.9% operating margin its highest ever.…
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Compound growth estimate
Estimated total
$17,175
Your contributions
$13,000
This is an estimate, not a prediction. Monthly compounding; taxes, fees and inflation are excluded.
This article is for educational purposes only and isn't personalized financial, tax or legal advice. Consider talking with a qualified professional about your situation.
Kiara Miller — Founder & Editor
Kiara Miller is the founder and editor of The Evergreen Edit. He has been doing independent finance research for two decades and reviews every article before it's published.
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