Amazon Q3 profit drop disappoints investors; stock falls 7%

Amazon reported a profit decline in the third quarter of 2026, with earnings per share falling to $1.89 from $1.95 a year earlier, missing analyst expectations of $1.97. The stock dropped over 7% in pre-market trading following the announcement. Revenue rose 12% year-over-year to $201.94 billion, though this fell short of the $202.21 billion market forecast. Amazon's cloud division AWS grew 39% to $46 billion in revenue, with operating income up 55% to $17.8 billion, exceeding analyst estimates. Investors were concerned about heavy spending on AI data centers, with capital investments reaching $77.3 billion in the quarter—about $20 billion more than expected. Amazon plans over 40% annual AWS growth through 2028, while free cash flow outflow widened to over $42 billion over the past year.