Observed Signal · Oct 29, 2026 · Earnings Report · Source: CNBC Technology · Impact: 4/5 · Sentiment: Neutral
Amazon Q3 earnings: AWS growth, AI spending in focus
A global tech selloff on Friday saw the Nasdaq 100 drop 3.2%, wiping out over $1 trillion, as weak earnings from Amazon and Intel cast doubt on the AI boom. Intel plunged up to 30%, its worst day since 1974, on weak Q4 guidance, while Alphabet fell 13% earlier, losing $500 billion. Despite Amazon's revenue growing 12% to $201.9 billion and AWS up 39%, its e-commerce slowed and free cash flow was negative again. However, Amazon also revealed that over 400 million customers used its rebranded Alexa for Shopping (formerly Rufus) in the past year, with users spending 50% more, and announced 100+ new capabilities. Global chipmakers like Samsung, SK Hynix, and ASML fell. Analysts warn of a negative feedback loop from hedge fund unwinding, though strong AI demand and AWS growth suggest repricing.
Amazon's Q3 earnings are a bellwether for cloud and ad spending trends, with implications for the broader adtech ecosystem.
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Key Takeaways & Evidence Grounding
- Nasdaq 100 fell 3.2%, losing over $1 trillion; Intel plunged up to 30% on weak guidance.
- Amazon Q3 net sales were $201.9 billion, up 12% year-over-year; AWS grew 39%, but free cash flow was negative for the second consecutive quarter.
- Alphabet shares fell 13%, erasing ~$500 billion in market cap; global chipmakers also fell sharply.
- Over 400 million customers used Alexa for Shopping in the last 12 months; these users spend 50% more than non-users.
- Amazon announced over 100 new capabilities for Alexa for Shopping ahead of the holidays.
Connected Companies & Entities
26 Entities mapped“Amazon is reporting Q3 earnings with focus on AWS growth and AI spending.”
“AWS segment sales grew 39% year-over-year, contributing to Amazon's overall revenue.”
“Amazon blocked Meta's AI agent Muse from shopping on its platform.”
“Alphabet reported negative free cash flow in its latest quarterly earnings.”
“Amazon sued Perplexity last year over AI shopping bots.”
“Microsoft's free cash flow declined 27% in fiscal first quarter.”
“OpenAI is pushing into AI shopping tools, posing a risk to Amazon's ad business.”
“Intel shares plunged 29% after issuing weaker-than-expected guidance.”
“SK Hynix shares fell 7.1% in South Korea.”
“Major European semiconductor names, including ASML, saw sharp declines.”
“Chip stocks including Micron, Nvidia and Arm were lower in premarket trade.”
“Samsung shares fell 3% in South Korea.”
“RBC analyst noted Intel's Q3 was positive but the outlook disappointed due to weak PC business.”
“JPMorgan estimates big tech will invest around $900 billion in AI this year.”
“SoftBank shares fell 6%, down 48% from their June high.”
“Apple is among the 'Magnificent Seven' that are still up year-to-date.”
“Chip stocks including Micron, Nvidia and Arm were lower in premarket trade.”
“Emmanuel Cau, head of European equity strategy at Barclays, commented on AI returns and investment commitments.”
“Nomura strategist Charlie McElligott noted hedge funds are unwinding positions on the 'Magnificent Seven'.”
“Bank of America cut its buy recommendation for Intel.”
“Citigroup summarized Intel's report as 'Two steps forward, one step back'.”
“UBS analysts commented on Intel's revenue outlook and Amazon's AWS revenue shortfall.”
“Chip stocks including Micron, Nvidia and Arm were lower in premarket trade.”
“A record hack at Binance led to cryptocurrency losses of around $6.3 billion, impacting the crypto market.”
“Coinbase lost 12.7% on Thursday following the Binance hack.”
“Robinhood lost 8.4% on Thursday following the Binance hack.”
Ontology Mapping & Concepts
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
Amazon Q2 Earnings Focus on Cloud and Capex
Amazon is scheduled to report second-quarter 2026 results after the bell on July 30, with investors focused on cloud growth and capital expenditures. Street estimates compiled by LSEG expect $1.82 in EPS and $196.47 billion in revenue, with AWS revenue of about $40.54 billion and advertising revenue of $19.43 billion. Amazon reiterated February guidance for roughly $200 billion in 2026 capex, while some analysts (including Morgan Stanley) expect that figure to rise amid rising AI-related infrastructure demand. The company reported $44.2 billion in capex in Q1 and Q2 capex is expected near $49.3 billion per FactSet data. Amazon continues cloud and chip partnerships with AI providers including OpenAI, Anthropic and Meta.
Amazon Ads, AWS Drive Blockbuster Q3 Results
Amazon exceeded Wall Street expectations in Q3 2025, reporting revenue above $180 billion and net income over $21 billion. Growth was led by a 20% rebound at Amazon Web Services (AWS), with $33 billion in sales driven by core infrastructure and new AI workloads; the company is expanding capacity (nearly 4 gigawatts added) and launching 'Project Rainier,' a supercomputer cluster for AI. Amazon’s advertising business surged 24% to nearly $18 billion, aided by new partnerships with Netflix, Spotify and SiriusXM and stronger monetization of Prime Video and other properties. Quarterly operating income remained flat at $17.4 billion after a $2.5 billion FTC settlement and $1.8 billion in severance; free cash flow fell by about 70% amid heavy AI and infrastructure spending. CEO Andy Jassy framed AI-driven 'agentic commerce' as a future growth vector for e-commerce and advertising.
Amazon Q2 2026 Strong Growth, Accelerates AI Expansion
Amazon reported robust Q2 2026 results: consolidated revenue rose 20% to $200.6 billion and operating income climbed 43% to $27.5 billion. AWS revenue grew 37% to $42.2 billion — its fastest growth in 18 quarters and annualized near a $169 billion run rate — with AWS operating income rising to $16.6 billion and contributing roughly 60% of total operating profit. Net income was about $62.6 billion, largely driven by a roughly $53.4 billion pre-tax valuation gain from Amazon’s Anthropic stake. Management raised full-year cash CapEx guidance by $20 billion to about $220 billion for AI/cloud data-center, chip, robotics and satellite investments; the quarter’s AI-related spending produced negative free cash flow and included a reported $7.6 billion cash outflow. The Financial Times said internal misconfigurations led to AI budget overruns, prompting automated cost controls.
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