Amazon's Third-Quarter Revenue Reaches $201.9 Billion as AWS Grows 39%

Amazon increased its revenue by 12% year over year to $201.9 billion in the third quarter of 2026, but fell short of market expectations. The company's cloud computing division, Amazon Web Services (AWS), recorded its highest growth rate in nearly five years, expanding by 39.3%, while net income declined to $20.7 billion. Amazon's substantial spending on artificial intelligence infrastructure also remained a focus for investors.

According to Amazon's financial results released on October 29, 2026, the company's third-quarter revenue increased from $180.2 billion in the same period last year to $201.9 billion. Operating income rose from $17.4 billion to $28.1 billion, while the operating margin reached a company-record high of 13.9%.

In contrast, net income declined from $21.2 billion in the same period last year to $20.7 billion. Diluted earnings per share fell from $1.95 to $1.89. The company attributed the decline in net income largely to the impact on the year-over-year comparison of a $9.5 billion pre-tax gain from its investment in Anthropic recorded in the third quarter of 2025.

Amazon Web Services Revenue Increased by 39.3%

Revenue at Amazon's cloud computing division, AWS, increased by 39.3% in the third quarter, reaching approximately $46 billion. This marked the division's fastest growth in nearly five years. AWS operating income rose from $11.4 billion a year earlier to $17.8 billion. The company's North American sales increased by 6% to $112.9 billion, while international sales rose by 5% to $43.1 billion.

Amazon CEO Andy Jassy stated during the earnings call that demand for artificial intelligence services and new infrastructure capacity contributed to AWS growth. The company reported increased customer adoption of technologies such as Trainium AI chips and AgentCore.

AI Investments to Reach $220 Billion

Amazon recorded capital expenditures of $75.9 billion in the third quarter. The company maintained its expectation that total capital expenditures for 2026 would reach approximately $220 billion. A significant portion of the spending is being directed toward AI data centers and cloud computing infrastructure.

The substantial investments also affected the company's cash flow. Over the trailing 12-month period, free cash flow declined from a positive $14.8 billion recorded in the previous year to a negative $42.4 billion.

Amid investor concerns over high spending and financial results that fell short of expectations, Amazon shares declined by more than 6% in after-hours trading on October 29 following the earnings announcement.

Amazon Assesses Competition From AI Shopping Agents

Amazon CEO Andy Jassy also addressed the impact of third-party AI shopping agents on e-commerce during the call with analysts. Jassy stated that users had not yet widely adopted these tools and that the current shopping experience was not as advanced as transactions conducted directly through Amazon.

In statements regarding the company's own AI-powered shopping services, Amazon reported that more than 400 million customers had used Alexa for Shopping over the past 12 months. According to Jassy, customers who used the service spent 50% more per order than those who did not.

Amazon forecasts sales revenue of between $240 billion and $247 billion and operating income of between $28.5 billion and $33.5 billion for the final quarter of 2026.