Amazon Earnings: AWS Jumps 39% but Spending Worries Linger

Amazon's cloud business grew faster than it has in almost five years in the third quarter, but investors focused on how much the company is spending to get there. The results, reported on October 29, landed in the middle of a broader debate about AI spending.

The numbers

According to CNBC and Opening Bell Daily:

• AWS sales rose 39% to $45.98 billion, the cloud unit's fastest growth in nearly five years.
• Capital spending: Amazon kept its 2026 capital expenditure forecast at about $220 billion. Capital expenditure (capex) is money spent on data centers, chips and other equipment.
• Free cash flow was negative for the second straight quarter, and the shortfall grew from the previous period. Free cash flow is the cash left after a company pays for operations and investments.
• One report described a third-quarter miss on both revenue and earnings, so check the company's own release for the full detail.

How the stock reacted

The reported moves differ widely. One report said Amazon shares slipped about 1.4% at the close on Friday, while InvestingLive carried a headline of a drop of over 12%, which appears to describe an earlier after-hours move. Treat any single percentage as approximate until you check a live quote.

Why it matters

Strong cloud growth is the good news: it shows companies are still buying AI computing power. The worry is the cost. When spending rises faster than cash coming in, investors start asking when the investment pays off. Yahoo Finance said disappointing Intel and Amazon results fed AI-spending concerns on Friday, when the Nasdaq Composite fell 2.86%.

Amazon had reportedly been raising its spending plan for the year, with memory costs cited as one reason, so the $220 billion figure is a ceiling investors will watch closely.

What to watch next

• Free cash flow in the next report. A third negative quarter would add to the pressure.
• Whether AWS growth holds near 39%. Slower growth with the same spending would be the worst combination.
• Other big tech spending updates. Apple and others report this week, and each spending forecast will be compared with Amazon's.

Sources

• CNBC: Amazon, Intel shares fall after earnings
• Opening Bell Daily: Amazon and Intel fall after earnings
• InvestingLive: Earnings bloodbath
• Yahoo Finance live blog, October 30

This article is for informational purposes only and is not financial advice. Markets move quickly; check live prices before making decisions.