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Amazon Stock Slides After Hours on EPS Miss

Amazon posted a record operating margin and its fastest cloud growth in nearly five years, but earnings per share and revenue landed just under analyst averages and free cash flow turned negative.

Amazon.com (NASDAQ: AMZN) shares fell more than 7% in after-hours trading today after the e-commerce and cloud group reported third-quarter earnings per share of $1.89. That was below the $1.96 analyst average, and revenue of $201.9bn was fractionally short of the $202.26bn average.

The stock had already closed today’s regular session at $243.79, down 4.25%, before the results. By 4:12pm EDT (8:12pm UK time) it was at $225.46 after hours, down 7.5% on that close, a fall that came after the release and ahead of the earnings call.

AMZN.US

The business itself was strong. Operating income rose to $28.1bn from $17.4bn a year earlier, a record margin of 13.9%, on sales up 12%. Earnings per share still fell from $1.95 because the prior-year figure included $9.5bn of pre-tax gains on Amazon’s stake in AI developer Anthropic.

The engine was AWS, Amazon’s cloud computing arm. Its sales rose 39% to $46.0bn, the fastest growth in nearly five years, and operating income reached $17.8bn against $11.4bn, a 38.7% margin. Amazon projected AWS growth of more than 40% in both 2027 and 2028.

Line chart of AWS year-on-year sales growth rising from 17% in Q2 2025 to 39% in Q3 2026
AWS year-on-year sales growth excluding FX has risen every quarter since Q2 2025. Source: Amazon.

The cost is cash. Trailing 12-month free cash flow, operating cash minus capital spending, was negative $42.4bn against positive $14.8bn a year earlier, even with operating cash flow up 29% to $168.3bn. Amazon still expects about $220bn of cash capex, spending on data centres and equipment, in 2026.

Long-term debt stood at $173.1bn, up from $65.6bn at December 2025.

Alphabet (NASDAQ: GOOGL) fell sharply earlier today after its own results, in a tech sell-off that looked tied to jitters over AI spending. The Nasdaq Composite closed down 1.38%.

For the fourth quarter, Amazon guided to sales of $240.0bn to $247.0bn, a midpoint of $243.5bn against the $244.31bn analyst average, and operating income of $28.5bn to $33.5bn, up from $25.0bn a year earlier.

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