Cloud growth hit its fastest pace in nearly five years and profits set a record, yet Amazon fell more than 7% after hours 📉—what exactly was wrong with this earnings report?
Amazon $AMZN reported its Q3 2026 results after the market close on October 29 (U.S. Eastern Time):
1. Revenue totaled $201.9 billion, up 12% year over year, compared with $180.2 billion in the same period last year. North America generated $112.9 billion, up 6%, while International generated $43.1 billion, up 5%.
2. Operating income was $28.1 billion, compared with $17.4 billion in the same period last year. The operating margin was 13.9%, the highest in the company’s history.
3. AWS revenue was $46 billion, up 39% year over year—the fastest growth in nearly five years—with an annualized revenue run rate of $184 billion. AWS operating income was $17.8 billion, compared with $11.4 billion in the same period last year.
4. But EPS was $1.89, below expectations of $1.97. Q4 revenue guidance was $240 billion to $247 billion, with the midpoint below the market’s $244.5 billion estimate. Q4 operating income guidance was $28.5 billion to $33.5 billion, with the midpoint also below expectations of around $33 billion.
5. The market gave the report a thumbs-down at first: shares fell more than 7% after hours.
My take: the split verdict on this report isn’t about the quarter just ended, but the one ahead. AWS growth and margins are genuinely strong, showing that demand for AI infrastructure is still coming through. But the EPS miss and the soft midpoint of Q4 guidance effectively deliver the good news all at once, while leaving concerns about holiday-season consumer spending for next quarter. Two things to watch: how management explains the shortfall below operating income on the earnings call, and whether AWS can help push Q4 results toward the top end of guidance. I wouldn’t chase the first move on earnings night; I’d wait for the guidance details to be unpacked. For now, I’ll keep AWS on my radar.
Amazon $AMZN reported its Q3 2026 results after the market close on October 29 (U.S. Eastern Time):
1. Revenue totaled $201.9 billion, up 12% year over year, compared with $180.2 billion in the same period last year. North America generated $112.9 billion, up 6%, while International generated $43.1 billion, up 5%.
2. Operating income was $28.1 billion, compared with $17.4 billion in the same period last year. The operating margin was 13.9%, the highest in the company’s history.
3. AWS revenue was $46 billion, up 39% year over year—the fastest growth in nearly five years—with an annualized revenue run rate of $184 billion. AWS operating income was $17.8 billion, compared with $11.4 billion in the same period last year.
4. But EPS was $1.89, below expectations of $1.97. Q4 revenue guidance was $240 billion to $247 billion, with the midpoint below the market’s $244.5 billion estimate. Q4 operating income guidance was $28.5 billion to $33.5 billion, with the midpoint also below expectations of around $33 billion.
5. The market gave the report a thumbs-down at first: shares fell more than 7% after hours.
My take: the split verdict on this report isn’t about the quarter just ended, but the one ahead. AWS growth and margins are genuinely strong, showing that demand for AI infrastructure is still coming through. But the EPS miss and the soft midpoint of Q4 guidance effectively deliver the good news all at once, while leaving concerns about holiday-season consumer spending for next quarter. Two things to watch: how management explains the shortfall below operating income on the earnings call, and whether AWS can help push Q4 results toward the top end of guidance. I wouldn’t chase the first move on earnings night; I’d wait for the guidance details to be unpacked. For now, I’ll keep AWS on my radar.
