Amazon Sees $220 Billion in Capital Spending as AWS Grows 39.3% in Third Quarter
Key Facts
Amazon reported net sales of $201.94 billion in the third quarter of 2026, up from $180.17 billion in the same period a year earlier, but below analysts’ estimate of $202.2 billion, according to the Associated Press. The company posted net income of $20.69 billion, or $1.89 a share, compared with $21.19 billion and $1.95 a share a year earlier. Earnings per share also fell short of analysts’ estimate of $1.97. After the results were announced, the stock fell more than 6% in after-hours trading on October 29, while its closing price that day was $246.22, according to EL7 data. Investors focused on the company’s core business, according to AP, despite faster sales growth at its cloud unit.
AWS stood out as a bright spot in the results, with cloud computing sales rising 39.3% in the quarter ended September 30, compared with growth of 37% in the previous quarter. AP described that as the unit’s fastest growth in about five years. The acceleration supports the company’s performance at a time when overall sales fell short of analysts’ expectations. But it did not prevent the stock from falling after the close, as the report said investors focused on the core business. AWS results, alongside the scale of planned capital spending, put the ability to meet demand among the key issues to watch in the results.
Amazon said the timing of Prime Day affected the year-on-year comparison for third-quarter sales. The event fell in the second quarter of 2026 in most large countries, while it took place entirely in the third quarter of 2025, according to AP. The difference in timing means the comparison was affected by sales related to the event being distributed across different quarters. Still, net sales reached $201.94 billion, versus $180.17 billion a year earlier, and remained below analysts’ estimate of $202.2 billion. The company also said it would hire 300,000 seasonal workers in the United States for the 2026 holiday shopping season, up from 250,000 the previous year.
Amazon raised its 2026 capital spending forecast to $220 billion, compared with an investment plan of $200 billion announced in February and actual spending of $128 billion in 2025, according to AP. The agency said the spending is focused largely on artificial intelligence, but also includes robotics, semiconductors and satellites. In an earlier briefing to investors during the summer, Chief Executive Andy Jassy said spending at the $220 billion level would not give the company enough capacity to meet all the demand it has in 2026. That points to infrastructure expansion underway against demand that exceeds available capacity, as investment grows compared with the previous year and the plan announced in February.
Jassy said in July that capacity constraints would continue into 2027, adding that the demand the company already has for 2028 is “remarkable.” That places the current spending plan within an expansion path that extends beyond this year, according to remarks cited by AP. In the broader context of concerns about spending on AI infrastructure, the agency’s report noted that Alphabet’s purchases of property and equipment exceeded $51 billion in the third quarter, after the company recorded more negative free cash flow. The report said concerns about spending on data centers and chips had spread across the AI sector. Amazon shares fell after the close as investors, according to AP, focused on the company’s core business.
For the fourth quarter, Amazon expects net sales of between $240 billion and $247 billion, equivalent to year-on-year growth of between 12% and 16%, according to company guidance cited by AP. The range compares with analysts’ estimate of $244.16 billion. The guidance is the company’s estimate for the quarter that includes the holiday shopping season, after it said it would increase seasonal hiring in the United States to 300,000 from 250,000 the previous year. Sales guidance is being watched alongside AWS growth and the scale of capital investment, after sales topped the prior year’s level but missed the third-quarter estimate. The market’s assessment of upcoming results is expected to focus on whether the company meets its guidance range and whether available capacity keeps pace with demand that Jassy described as already in place for the coming years.