Amazon shares drop 4% as $220 billion AI spending plan weighs on profit and cash flow

Amazon shares fell sharply in after-hours trading Thursday after the company reported third-quarter revenue and earnings below Wall Street expectations, while its $220 billion capital expenditure plan reignited concerns over AI expansion costs. The stock dropped more than 4% after falling 4.3% in regular trading. Amazon reported revenue of $201.9 billion for the quarter, up 12% year-over-year but below analyst expectations of $202.2 billion. Net income declined to $20.7 billion, or $1.89 per share, from $21.2 billion, or $1.95 per share, a year earlier, missing the $1.97 per share forecast. AWS revenue grew 39% to $46 billion, beating expectations, though capital expenditures reached $75.9 billion in the quarter, contributing to a $42.4 billion cash outflow over the past 12 months. The company maintained its 2026 capital expenditure forecast of about $220 billion, with much directed toward AI infrastructure and data centers. North American sales rose 6% to $112.9 billion, slightly below forecasts, while advertising growth slowed to 12% partly due to Prime Day timing shifts. Amazon projected fourth-quarter revenue of $240 to $247 billion.