Amazon's cloud unit shines but cash flow turns negative

Amazon reported third-quarter earnings Thursday, missing analyst expectations for both revenue and earnings per share, while its cloud unit AWS beat forecasts with 39% year-over-year growth. Net sales rose 12% to $201.9 billion, below the $202.2 billion expected, and earnings per share were $1.89 versus the $1.97 forecast. AWS sales hit $45.98 billion, surpassing the $45.29 billion estimate, with operating income growing to $17.8 billion from $11.4 billion a year earlier. The biggest concern was negative free cash flow of $42.4 billion over the trailing 12 months, down from positive $14.8 billion a year prior, driven largely by AI investments. Amazon reiterated its 2026 capital expenditure forecast of about $220 billion, nearly matching its projected fourth-quarter sales of $240 billion to $247 billion.