Amazon shares fell more than 7% in extended trading Thursday after the company reported third-quarter earnings and revenue that fell short of Wall Street expectations, according to CNBC.
Amazon posted negative free cash flow for the second consecutive quarter, with an outflow of $42.4 billion for the trailing twelve months, an increase of 386% year over year. The company said the shortfall was primarily due to higher purchases of property and equipment tied to AI investments. In the prior quarter, negative free cash flow was $7.6 billion.
Third-quarter net income was $20.69 billion, or $1.89 per share, compared with $21.19 billion, or $1.95 per share, a year earlier. The company said the decline was driven mainly by a $9.5 billion pre-tax gain from its investment in Anthropic recorded in the third quarter of 2025.
Amazon Web Services sales rose 39% year over year to $45.98 billion, above the $45.29 billion forecast from StreetAccount. CEO Andy Jassy said AWS expects revenue growth of "over 40%" next year and in 2028.
Online sales rose 2% to $68.47 billion, short of the $69.68 billion analysts projected, according to StreetAccount. Advertising revenue fell 11% to $19.64 billion, missing the $20.82 billion consensus. CNBC reports that both units were affected by Amazon's decision to move its Prime Day sale into the second quarter in several countries to avoid conflicting with the FIFA World Cup in July.
Amazon held its 2026 capital expenditure forecast at $220 billion. Jassy said the company expects to "spend meaningfully more in 2027." For the fourth quarter, Amazon expects revenue between $240 billion and $247 billion, compared with the $244.5 billion consensus estimate from LSEG.