Amazon Web Services grew 39% in the third quarter to $46 billion, the cloud unit's fastest rate since the end of 2021. Amazon's free cash flow over the past 12 months swung to an outflow of $42.4 billion, from an inflow of $14.8 billion a year earlier, and shares fell more than 6% in extended trading Thursday, CNBC reported.

Amazon's earnings release put total net sales at $201.9 billion, up 12%, and operating income at $28.1 billion, up from $17.4 billion. AWS earned $17.8 billion of that. Net income slipped to $20.7 billion, or $1.89 a share, because last year's quarter included $9.5 billion in pre-tax gains on Amazon's Anthropic stake. Analysts polled by LSEG had expected $1.96 a share.

Rows of glowing server racks in a large data center aisle under cool blue light, illustrating cloud computing growth

"Our AWS investment in functionality and infrastructure is working," said Andy Jassy, Amazon's president and CEO, adding that the company projects AWS revenue growth "of over 40% both in 2027 and in 2028."

Where the cash went

The cash outflow came from a $94.8 billion year-over-year increase in purchases of property and equipment, which Amazon said "primarily reflects investments in artificial intelligence." Capital expenditures hit $77.3 billion in the quarter, against $35.1 billion a year earlier and a FactSet estimate of $58.7 billion. Amazon kept its 2026 forecast at about $220 billion, and Jassy told analysts the company expects to "spend meaningfully more in 2027."