Amazon earned $1.89 a share against forecasts of $1.96 to $1.97, on revenue of $201.9 billion against the $202.2 billion expected.
Capital expenditure came in at $77.3 billion against consensus of $58.67 billion, and free cash flow over the past 12 months was an outflow of $42.4 billion.
It is the third big technology group in nine days to be sold on the cost of its AI build-out.
Alphabet, the Google parent, fell 12% on Thursday after earnings per share of $2.12 missed the $2.99 forecast, with capex of $51.4 billion and negative quarterly free cash flow of $9.1 billion.
Meta set the pattern
Meta's shares fell 7.23% to close at $647.08 on 22 October, the day after it reported third-quarter results, even though revenue beat consensus.
Quarterly capex of $34.91 billion exceeded the $32.79 billion in operating cash flow, leaving free cash flow negative by $2.12 billion.
Meta also raised the bottom of its 2026 capex range to $135 billion, and the cost of insuring its debt against default hit record highs.
It was Meta's third post-earnings drop this year, after falls of about 9% in April and 8% in July.
The message from the market is that strong revenue no longer buys forgiveness for spending that outruns cash generation.
Microsoft shows the other side of the trade: it beat forecasts, spent less than it had guided, and closed almost unchanged.
Not all bad news
Amazon held its 2026 capex plan at about $220 billion, and Amazon Web Services, its cloud arm, grew 39% to $46.0 billion, its fastest rate in almost five years.
Read more
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Operating income of $28.1 billion was a record margin of 13.9%, and chief executive Andy Jassy expects AWS growth above 40% in 2027 and 2028.
Fourth-quarter revenue guidance of $240 billion to $247 billion sits around the $244 billion consensus, but operating income guidance of $28.5 billion to $33.5 billion is below the $33.2 billion expected.
Broker view
Yorkville Ives, the broker, kept its "outperform" rating and $300 price target, about 18% above the $254.60 share price in its note.
Analyst Dan Ives said a higher 2027 spending figure would confirm demand rather than act as a warning, given an AWS backlog near half a trillion dollars.
