All figures are for the quarter ended Sep 30, 2026, from Amazon's release on Oct 29, 2026, unless stated otherwise. Comparisons are with the same quarter a year earlier. Figures marked as our math are our own calculations.
Amazon's cloud business grew at its fastest pace in nearly five years. The company's Q3 release shows AWS revenue of $46.0B, up 39% from $33.0B, which Amazon puts at a $184B annualized run rate. Excluding currency moves, AWS growth has sped up in each of the last five quarters, from 17% in Q2 2025 to 37% in Q2 2026 and now 39%. AWS operating income was $17.8B, up from $11.4B, for a margin of 38.7%.
At the company level, Amazon's revenue was $201.9B (+12%). Amazon says growth would have been about 4 points higher if Prime Day hadn't moved into Q2 this year. Operating income rose to $28.1B from $17.4B, and the 13.9% operating margin is the highest Amazon has reported. Net income fell to $20.7B, or $1.89 a share, from $21.2B, mainly because the year-earlier quarter included $9.5B of pre-tax gains on Amazon's stake in Anthropic. CNBC reported that earnings per share and total revenue came in just under analysts' estimates, while AWS came in above them.
The spending is the bigger number. Amazon's purchases of property and equipment were $77.3B in the quarter, more than double the $35.1B a year earlier. Over the 12 months to Sep 30, 2026, those purchases, net of proceeds and incentives, reached $210.7B, up $94.8B, an increase Amazon says "primarily reflects investments in artificial intelligence." Operating cash flow grew 29% to $168.3B over the same 12 months, so trailing free cash flow was an outflow of $42.4B, against an inflow of $14.8B a year earlier and an outflow of $7.6B at the end of Q2. For Q3 alone, operating cash flow was $42.4B, roughly $33.5B short of net equipment purchases (our math: $42.4B minus $77.3B plus $1.4B of proceeds).
On the outlook, Amazon said it continues to expect 2026 cash capital expenditures of about $220B. Our guide to reading capex keeps that cash-flow line, leases and full-year guidance as separate figures. For the December quarter it guided revenue of $240.0B to $247.0B (+12% to 16%) and operating income of $28.5B to $33.5B, against $25.0B a year earlier. Andy Jassy said in the release that Amazon projects AWS revenue growth of "over 40% both in 2027 and in 2028." Amazon also listed memory-chip supply among the risks to its guidance.
For builders, the release points at where the money goes. Amazon says Fortune 500 spending on Bedrock, its model-hosting service, is up nearly 7 times year over year and total Bedrock token volume nearly 17 times. Customers deployed twice as many agents on AgentCore in Q3 as in the prior three quarters combined, and a new TorchNeuron layer lets existing PyTorch code run on Amazon's Trainium chips.
Amazon was the last of the big cloud reports in this week's earnings calendar. A day earlier, Microsoft and Alphabet showed the same split between fast cloud growth and spending that outruns cash, and Meta's Q3 followed the pattern.
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Carrie F.AI Money desk
Carrie F. is a Codema.ai house byline: a pen name used by our editorial desk, not one individual journalist. It covers AI Money: earnings from Big Tech and chipmakers, AI capital spending and how the build-out is financed, plus plain-English explainers such as free cash flow, EPS and how to read a 10-Q. It's news and analysis, not financial advice. Pieces under this name are written with AI assistance and reviewed by a human editor before they're published.
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