Amazon forecasts fourth-quarter operating income of $28.5 billion to $33.5 billion, below analysts’ expectations at the midpoint. CEO Andy Jassy expects capital spending to rise further in 2027.
Amazon’s heavy spending on infrastructure for superintelligence (SI) pushed its trailing-year free cash flow—the cash left after operating needs and investment in long-lived assets—below zero for the period ended 30 September 2026.
| Reporting period | Free cash flow, billions of dollars |
|---|---|
| Year-earlier period | 14.8 |
| Preceding quarterly report | -7.6 |
| Latest period | -42.4 |
Dave Wagner, a portfolio manager at Aptus Capital Advisors, said capital spending had swallowed the cash generated by operations and called the negative trend alarming. Jesse Cohen, a senior analyst at Investing.com, identified free cash flow and what he called “weak guidance” as reasons for Amazon’s share decline.
On the earnings call, CEO Andy Jassy said Prime Video was profitable in its own right and had a revenue run rate in the tens of billions of dollars annually, rather than reporting that figure as revenue for a completed year, Variety reported. Amazon’s third-quarter 10-Q filing disclosed that its combined video and music expense, which covers more than Prime Video, was $5.9 billion in the third quarter, up about 7% from a year earlier, and $18.8 billion in the first nine months of 2026, up about 20%.
Two reports give different figures for third-quarter capital expenditure, meaning investment in long-lived assets. Neither report explains the difference.
Customs authorities specify a charge per distinct item, regardless of value, additional to the €3 duty on parcels below €150. Platforms, sellers or carriers are due to pay it.
| Account | Amount | Reported detail |
|---|---|---|
| Fortune | $75.9 billion | Most went to AWS, The Register said. |
| Reuters, carried by CNA | $77.26 billion | About $20 billion above estimates compiled by LSEG. |
Amazon increased its 2026 capital-spending plan from $200 billion announced in February to $220 billion disclosed in July, then reaffirmed the higher forecast with its October 29 results. Jassy cited higher memory-chip costs as the main reason for the increase, The Guardian said. He told investors over the summer that even the larger plan would not provide enough capacity to meet all customer demand this year.
Amazon Web Services (AWS), the company’s cloud-computing unit, generated third-quarter revenue of $45.98 billion, up 39.3% from a year earlier. Growth accelerated from 37% in the preceding quarter.
Jassy said investment in AWS services and infrastructure was working. As evidence of demand, he said AWS installed a specialized SI chip about every 14 seconds and customers used new capacity almost as quickly as it became available.
Amazon forecasts fourth-quarter operating income of $28.5 billion to $33.5 billion, below analyst expectations at the midpoint. Chief Financial Officer Brian Olsavsky said fuel and other transportation costs were expected to exceed third-quarter costs.
Jassy said Amazon could fund its infrastructure plan and predicted that the investment would permanently change the company’s revenue and free cash flow. He expects capital expenditure to be “meaningfully more” in 2027 than in 2026, without specifying an amount. He projects AWS revenue growth above 40% in both 2027 and 2028.
3 min
The deposit facility, main refinancing and marginal lending rates remain at 2.50%, 2.65% and 2.90%. ECB President Christine Lagarde said policymakers debated a hike but unanimously held, citing stable underlying inflation, tighter long-term financing and uncertainty as reasons to await more data.
2 min
ADT shareholders would receive $10 per share in cash if the acquisition closes. The companies expect completion in the first quarter of 2027, subject to shareholder and US antitrust approvals.
3 min
