Amazon shares came under pressure after its Q3 report, with EPS of $1.89 missing the Zacks Consensus Estimate of $2.01 and revenue of $201.94 billion narrowly falling short of $202.11 billion. Operating income rose 61% to $28.1 billion, with a record operating margin of 13.9%. AWS revenue grew 39% year over year to $46 billion, its fastest growth in years, driven by AI infrastructure demand, while Amazon reaffirmed its $220 billion capex outlook for 2026. Free cash flow was negative $33.5 billion in the quarter. For Q4, Amazon guided to revenue of $240-$247 billion and operating income of $28.5-$33.5 billion; at under $250 a share, AMZN trades at 24x forward earnings versus the S&P 500's 19x, and carries a Zacks Rank #3 (Hold).
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
Amazonearningscloud computingAI investmenttech stocks
Open a keyword to see other news on the same topic.
Related news
- Amazon: 3 Key Takeaways for Long-Term Investors
In its third-quarter 2026 earnings call on Oct. 29, Amazon CEO Andy Jassy said AWS could become a business with trillion-dollar annual revenue within five to 10 years. AWS revenue grew 39.3% year over year to an annualized run rate of $184 billion, and Jassy expects growth above 40% in 2027 and 2028. Same-day delivery of perishable groceries is described as lifting purchases across other categories, with shoppers buying nearly seven times more Everyday Essentials units. Amazon plans to sell its Trainium AI chips outside AWS in late 2027 after strong outside demand. Capital expenditures are expected to reach about $220 billion in 2026, and management says it is accelerating capex payback.
- Is Amazon (AMZN) a 'Buy' Ahead of Earnings?
Amazon (AMZN) is set to report third-quarter results after the closing bell on Thursday, and the stock currently carries a Zacks Rank #3 (Hold). The company missed earnings estimates in two of the past three quarters. Analysts expect EPS of $2.01, up 3.1% year over year, and revenue projected to rise 12.2% to $202.1 billion; estimates for the quarter have fallen 1.95% over the past 60 days. The article cites international expansion and AI integration as strengths, while heavy capital expenditure on AI infrastructure, a growing debt burden and competition from Microsoft Azure and Google Cloud are concerns. Shares are up about 9% in 2026, lagging a broader market that is up by double digits, and the article says an earnings beat may be what the stock needs to move higher.
- 2 Monster Stocks to Buy and Hold for the Next 20 Years
The article argues that Alphabet and Amazon have durable moats that can keep earnings growing for decades, and that their post-earnings sell-offs over heavy AI spending offer a better entry point. Alphabet fell about 13% after its Oct. 30 report, even though Google Cloud revenue more than doubled to about $31 billion and its operating margin rose to 36% from 24%; the stock trades at 17 times 2026 earnings estimates versus 21 for the Nasdaq-100 average. Amazon's AWS revenue grew 39%, its sixth straight quarter of faster growth, but shares slid about 7% in pre-market trading on Oct. 30 and trade near 30 times 2026 earnings estimates. The main risk cited is that AI spending keeps weighing on free cash flow, and profits could fall short if AI demand cools before those data centers pay off.
- Amazon's 'Safe' Retail Business Earns Less Than AWS Does. Is the Stock Still a Good Buy for Cautious Investors?
AWS is now Amazon's main profit driver: second-quarter AWS sales rose 37% to $42 billion, making up 21% of Amazon's sales but 60% of its operating income. Still, Amazon plans $220 billion in capital expenditures this year, and trailing 12-month free cash flow turned negative at a $7.6 billion outflow. CEO Andy Jassy said capacity still won't meet demand this year or next, and the third-quarter report is set for October 29. At about 29x forward earnings, down from over 34x a few months ago, the article argues Amazon may still suit long-term investors comfortable with volatility, while risk-averse investors could start with a smaller position and add over time.
- What Could Go Wrong With Amazon Stock?
Amazon (AMZN) earned $135 billion in net income over the four quarters to June 2026, well above its $93.7 billion of operating income, yet its free cash flow was negative $11.6 billion over the same twelve months. Most spending funds new AWS and generative AI capacity; in the June quarter Amazon spent $53.1 billion in cash on capital projects against $45.4 billion of operating cash inflow, and expects about $220 billion of cash capital spending in 2026, up from about $200 billion because memory costs more. Free cash flow fell from $48.3 billion in the twelve months to June 2024 to $13.5 billion a year later, then turned negative, while total debt rose to $223 billion from $134 billion. Investors pay 19.9 times earnings versus 23.0 for the S&P 500, and management cited a $496 billion backlog and 36.7% AWS revenue growth, with most AI capacity contracted for at least five-year terms. The article says the figure to watch is capital spending against operating cash when Amazon reports third-quarter results, expected in October 2026.
- Prediction : Amazon Next Chapter Could Be Its Most Important One Yet
24/7 Wall St. sets a price target of $332.67 for Amazon (AMZN), 30.4% above the current $255.20, and rates the stock a buy with 70% confidence. The thesis rests on AWS, which grew 37% last quarter, its fastest pace in 18 quarters, while Amazon plans to spend about $200B in 2026 on AI infrastructure, chips, robotics and satellites. The article flags risks: trailing free cash flow turned negative at about -$7.6B after second-quarter capex rose 68.44%, and long-term debt climbed to $119.1B from $65.6B. It compares Amazon's valuation with Microsoft and Alphabet, and says the author would stay constructive if AWS growth stays above 30% and free cash flow turns positive in 2027.
Related markets
Latest news
- XAU Resources Announces Planned Soil Sampling Program at the Noseno Gold Project, Guyana, Following Airborne Geophysics Interpretation
XAU Resources (TSXV: GIG) plans to start a field exploration program in early November 2026 on the Noseno gold property in northwest Guyana, where it holds an option to acquire 100%. The first stage is a soil sampling campaign of approximately 790 samples over 39 line-km in the core of Target Area 1, part of a planned program of about 4,325 samples over two priority areas. Interpretation of 5,247 line-km of airborne magnetic and radiometric data, acquired in 1994 and covering 865 km², identified a major NW-SE structure and at least two interpreted intrusive bodies, which the company considers prospective targets. Selective grab samples from an artisanal working near the historical Williams prospect returned 51.55 g/t Au and 6.13 g/t Au from quartz veins, though the company notes these are not necessarily representative of mineralization on the property. The company could not independently verify the original 1994 data, so the airborne interpretation is indicative only and requires ground verification.
- Chinese Tape Maker Soars 787% in Market Debut as Beijing Moves to Halt New IPO Filings
Crown New Materials Technology, a Chinese tape maker, surged as much as 787% in its market debut on Tuesday, creating two billionaires on paper. The move came as Beijing reportedly moved to restrict new IPO filings amid a stock-market slump, and shares reached 150.58 yuan.
- Five Ways North Korea Breaks Into Crypto Firms—and How Binance Was Hacked
Alleged North Korean hackers drained $6.3 billion from Binance in just 20 minutes, the largest crypto hack on record, according to the exchange. The attackers compromised an engineer's work computer through a fake job interview, used an internal AI tool to take over other engineers' computers, and then hijacked an internal wallet signing service with stolen credentials. The article also describes other tactics linked to North Korean groups, including fake employees, fake job interviews and poisoned code libraries, and Binance said it detected and prevented 57 suspected North Korea-linked cases in 2026. One group reportedly infected at least 30,000 devices in more than 100 countries between December 2025 and July 2026, took funds or credentials from over 7,000 crypto wallets, and moved around $10.71 million to North Korea. One estimate attributes 60% of all losses last year to DPRK-linked groups.
- Nvidia Stocks Rebound 2.84% Before November 17 AI Earnings Check
Nvidia (NASDAQ: NVDA) rebounded 2.84% to $207.80 at 11:00 a.m. ET on November 3, ending four straight losing sessions, after the prior session had pushed the shares below their 200-day moving average. The company will report results and hold its conference call on November 17. Its previously disclosed third-quarter revenue guidance is about $108 billion, plus or minus 2%, versus roughly $96.2 billion in the previous quarter, and reaching the midpoint would require about 12.3% sequential growth. The GuruFocus GF Score is 96 out of 100, with strong readings for profitability, growth and momentum, while the valuation component trails those strengths.
- Forget Nvidia: Eli Lilly Will Become “the Most Valuable Company in the World,” Says Macro Investor
Eli Lilly (LLY) hit a record high on Friday, with market value around $1.1 trillion, level with Berkshire Hathaway, after third-quarter sales rose 39% and the company raised its 2026 revenue forecast to $91-$92 billion from $85-$87 billion. Macro investor Jordi Visser argues Lilly will become the world's most valuable company, as its growth comes from healthcare spending that recurs every year, while Nvidia is more exposed to disruption. The article notes that passing Nvidia, which was worth $4.9 trillion, would require Lilly's value to rise far beyond its current level and would require Nvidia's earnings estimates to break down. Lilly trades at about 34x forward earnings, below its five-year average of 40x, though tirzepatide (sold as Mounjaro and Zepbound) made up 65% of its revenue in the first half of 2026, and generic makers have filed to sell copies of both in July.
- Top VC Warns: “Depreciation Is Going to Start Hitting” Microsoft, Google and Meta. Here’s Where Things Get Ugly
Big Tech lost nearly $900 billion in market value last week after another jump in AI spending. Alphabet fell 13% after reporting negative free cash flow of $9.1 billion in the third quarter, while Meta spent $34.9 billion on capex against $32.8 billion of operating cash flow. Scale Venture Partners' Rory O’Driscoll expects depreciation from roughly $500 billion of spending this year to start hitting earnings in 2027. Meta is already feeling it: its depreciation rose 44% in the third quarter, and its operating margin before a $9.89 billion legal charge fell about 5 points from a year earlier. Microsoft and Alphabet can offset this with cloud growth, such as Google Cloud revenue jumping 103%, but Meta has no cloud business to rent out its new capacity.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.