Amazon Cloud Revenue Surges as Heavy AI Spending Hits Cash Flow

Net sales climbed 12% to $201.9 billion, falling short of the $202.2 billion projected by FactSet analysts. Earnings per share also trailed expectations, landing at $1.89 against a predicted $1.97. Despite these misses, Amazon Web Services served as the report’s primary engine, generating $45.98 billion in revenue and marking a 39% increase over the previous year. Operating income for the cloud unit rose sharply to $17.8 billion, up from $11.4 billion in the third quarter of 2025.

This growth is shadowed by the company’s aggressive capital expenditure strategy. Amazon confirmed it remains on track to spend approximately $220 billion in capital expenditures for the 2026 fiscal year. To put the scale of this investment in context, the company’s total projected net sales for the upcoming fourth quarter range between $240 billion and $247 billion. This expenditure, largely funneled into AI, has effectively wiped out the company’s free cash flow, which swung from a positive $14.8 billion in 2025 to a negative $42.4 billion in the current trailing 12-month period.