Amazon shares slide as sales forecast, free cash flow disappoint

· Finance · United States

Amazon shares fell after the ecommerce and cloud giant delivered a rare double miss, with third-quarter earnings and revenue below Wall Street expectations, and guided to lower Christmas sales. The company reported negative free cash flow of $42.4 billion for the quarter while holding its 2026 capital expenditure plans unchanged, and CEO Andy Jassy said AI spending will be 'meaningfully' higher than $220 billion in 2027 even as cash flow sinks. The bright spot was AWS, where revenue grew 39% as the cloud unit signed deals with Meta and OpenAI during the quarter, helping it beat consensus. International and retail segments lagged the cloud business.

Why it matters：Amazon is testing how much investors will tolerate negative free cash flow to fund AI infrastructure, a trade-off every hyperscaler now faces as capex guidance climbs.

Key points

  • Negative free cash flow ballooned to $42.4 billion in the third quarter.
  • AWS revenue grew 39% as cloud rivals also accelerated.
  • The company guided to lower Christmas-quarter sales than expected.

Sources (original reporting)

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