Amazon’s cloud sales grow 39.3% as net income falls

Cash outflow alongside faster cloud growth

The BBC reported Amazon cash flow of approximately negative $42 billion for an unspecified measurement period.

Amazon president and CEO Andy Jassy said the established services of its cloud-computing unit, AWS, had strong operating margins—the share of sales left after operating costs. He said margins for superintelligence (SI) services were improving rapidly, even with higher component costs and significant depreciation charges, which spread investment costs over assets’ useful lives.

Spending plans and customer demand

As The Guardian detailed, Jassy told investors in July that Amazon expected fiscal 2026 capital spending, mostly on SI, to reach $220 billion, up from the $200 billion plan announced in February. He cited higher memory-chip costs as the main reason for the increase.

Jassy also told investors during the summer that even the higher spending would not provide enough capacity to meet all customer demand in 2026.

On the third-quarter earnings call, Jassy said customers preferred to run SI models close to their existing applications and data. Those SI tasks also used AWS’s basic computing services, reinforcing demand for both.

Jassy said he expected AWS investment to build a much larger business in revenue and free cash flow—the cash remaining after operating costs and capital spending—with strong returns on the money invested.

Holiday-quarter sales outlook

For the fourth quarter, which includes the holiday-shopping period, Amazon forecasts net sales of $240 billion–$247 billion. The company said that would represent 12%–16% growth from a year earlier. Analysts’ $244.16 billion forecast falls within Amazon’s range.