Andy Jassy asked investors to look beyond Amazon’s latest quarter to the scale of the prize ahead. The chief executive said the company would “spend meaningfully more in 2027” and had a “clear line of sight to attractive financial returns”. He called artificial intelligence “the biggest transformation in our lifetime”, adding: “There has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years.”
The immediate market response was less patient. Amazon released its third-quarter results after the market closed on Thursday, then saw its shares fall more than 6% in extended trading. One report put the decline at as much as 9%.
Revenue for the quarter was $201.9 billion, below Wall Street expectations of $202.25 billion to $202.31 billion. Online sales rose 2% year over year to $68.47 billion, also missing analysts’ projected $69.68 billion.
Amazon Web Services, its cloud division, supplied the brighter number. AWS revenue increased 39% year over year to $45.98 billion, its fastest growth in nearly five years. Jassy said AWS revenue growth rates were expected to be “over 40%” in both 2027 and 2028.
The cost of building for that growth was central to investors’ reaction. Capital expenditures reached $77.3 billion during the quarter, more than double $35.1 billion a year earlier and above analysts’ estimate of $58.7 billion. Amazon said the spending was driven largely by its investments in AI.
Free cash flow for the trailing twelve months was negative $42.4 billion, following positive $14.8 billion a year earlier, a 386% swing. Amazon held to its forecast for $220 billion of capital spending in 2026.
Jassy described the calculation in blunt terms. “This is a once-in-a-lifetime opportunity,” he told investors. “What we're seeing with AI, it's the biggest transformation in our lifetime. We're going to invest to continue being the leader.”
He said he expected AWS to become a $1 trillion revenue business within the next five to 10 years. Amazon’s chips business “continues to grow triple-digit percentages year over year,” Jassy said, and the company plans to make its Trainium chips available externally “late in 2027.”
Amazon’s relationship with AI startup Anthropic sits on both sides of the investment cycle. Anthropic has committed to spend at least $110 billion on Amazon cloud services from May 2025 through April 2036. Amazon has invested about $18 billion in Anthropic and committed to invest up to another $15 billion.
The company said its decrease in net income was driven primarily by a $9.5 billion pre-tax gain from its Anthropic investment that had been recorded in the 2025 third quarter.
For the fourth quarter, Amazon forecast revenue of between $240 billion and $247 billion. The midpoint was below Wall Street’s expectations of $244.5 billion. Shares fell more than 6% after the results as investors questioned whether the scale of Amazon’s AI spending would produce the returns Jassy has forecast.
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