Amazon's third quarter results delivered mixed signals for investors. The company reported net sales of $201.94 billion, up 12 percent year over year, but shares fell roughly 7 percent in after-hours trading. The main concern was free cash flow turning negative at $42.4 billion over the past twelve months, driven by aggressive AI infrastructure spending. Third quarter capital expenditure alone reached $77.26 billion, well above expectations.
AWS emerged as the bright spot, with revenue growing 39.3 percent to $45.98 billion, its fastest pace in nearly five years. AWS operating income jumped 55 percent to $17.8 billion. CEO Andy Jassy said Amazon installs an AI accelerator roughly every 14 seconds and expects AWS growth to exceed 40 percent in both 2027 and 2028. The company plans about $220 billion in capital spending this year, mostly for data centers and AI infrastructure.
Online retail told a less impressive story, with sales growing just 2 percent to $68.5 billion, the slowest rate since early 2023. AWS growth was supported by partnerships with OpenAI and Anthropic. Meanwhile, Alphabet's sharp 10 percent drop after weak free cash flow results shook the broader AI trade, adding pressure on Amazon's earnings reaction. Indian IT stocks rallied on concerns that cooling global AI investment could affect outsourcing demand.
In other AI-related news, Anthropic's free AI fluency courses have now been used by more than 1.1 million people. The courses were co-created by Rick Dakan and Joseph Feller, and the University of Texas at Austin is introducing an AI tutor based on a 4D Framework through Canva. Google is testing clearer labels in AI Mode to separate sponsored products from organic listings, using section headers to mark paid content. A Dartmouth College provost was placed on administrative leave after undisclosed AI use for tasks like email and calendar management, sparking debate about AI accountability in academia.
LG CNS reported strong quarterly results driven by AI and cloud demand, with sales up 9.3 percent and operating profit up 15 percent. AI and cloud revenue reached 961.5 billion won, over half of total sales. The company also invested about 380 billion won in GPUs for AI infrastructure. Separately, AI dubbing company Flawless sold its TrueSync and DeepEditor technologies to Steven Schuurman's venture TBellScout after filing for administration earlier in October.
Key Takeaways
- <ul><li>Amazon reported Q3 revenue of $201.94 billion, up 12 percent, but free cash flow turned negative at $42.4 billion due to heavy AI spending.</li><li>AWS revenue grew 39.3 percent to $45.98 billion, its strongest pace in nearly five years, with operating income up 55 percent to $17.8 billion.</li><li>Amazon plans about $220 billion in capital expenditure for 2026 and expects AWS growth above 40 percent in 2027 and 2028.</li><li>Amazon shares fell roughly 7 percent after hours as AI spending surpassed expectations, while Alphabet's 10 percent drop shook the AI trade.</li><li>AWS partnerships with OpenAI and Anthropic continue to support strong cloud growth.</li><li>Anthropic's AI fluency courses have been used by over 1.1 million people and remain free and widely accessible.</li><li>Google is testing new labels in AI Mode to clearly separate sponsored products from organic search results.</li><li>Dartmouth provost Joseph Helble was placed on leave for undisclosed AI use, raising questions about AI accountability in academia.</li><li>LG CNS saw AI and cloud revenue exceed half of total sales, investing 380 billion won in GPU infrastructure.</li><li>Flawless sold its TrueSync dubbing and DeepEditor tools to Steven Schuurman's TBellScout venture after filing for administration.</li></ul>
Amazon earnings test Indian IT rally as Alphabet rout shakes AI trade
Indian IT stocks have rallied this year as global AI investment cooled. Amazon reported its quarterly results after US markets closed on Thursday. Alphabet shares fell 10% after reporting weak free cash flow. Amazon's AWS cloud unit grew 37 percent in the April-June quarter. Investors will watch whether Amazon's cloud growth justifies its heavy AI spending.
Amazon Q3 results show AI spending drags free cash flow negative
Amazon released its third quarter 2026 results after US markets closed on Thursday. Net sales reached $201.94 billion, up 12 percent year over year. AWS revenue grew 39.3 percent to $45.98 billion, its fastest pace in nearly five years. Free cash flow turned negative at $42.4 billion over the past twelve months due to heavy AI investments. Third quarter capital expenditure reached $77.26 billion, far above expectations.
AWS revenue jumps nearly 40 percent as AI spending pressures cash flow
Amazon reported third quarter 2026 results with total revenue of $201.9 billion, up 12 percent. AWS revenue reached $46 billion, growing 39.3 percent year over year, its strongest growth in nearly five years. AWS operating income rose 55 percent to $17.8 billion. Free cash flow over the past twelve months turned negative at $42.4 billion. Amazon expects capital expenditures of about $220 billion in 2026 and forecasts AWS growth above 40 percent for 2027 and 2028.
Amazon stock drops 7 percent as AI spending surpasses expectations
Amazon shares fell about 7 percent after hours on Thursday. The company spent over $77 billion on property and equipment in the third quarter, mainly on data centers. Total revenue rose 12 percent to $201.9 billion. AWS continued strong growth supported by partnerships with OpenAI and Anthropic. Online retail sales grew only 2 percent to $68.5 billion, the slowest rate since early 2023. Amazon guided fourth quarter revenue between $240 billion and $247 billion.
Amazon stock falls but analysts see long term AI potential
Amazon shares fell 4.25 percent during regular trading and another 7.30 percent in after-hours trading on Thursday. AWS grew more than 39 percent, its fastest pace in five years. CEO Andy Jassy said Amazon installs an AI accelerator roughly every 14 seconds. Gene Munster noted Amazon is positioning itself as an AI data center and chip company rather than just a retailer. Amazon guided AWS revenue growth above 40 percent for both 2027 and 2028. Third quarter revenue of $201.94 billion missed analyst estimates.
Amazon Q3 earnings show AWS growth and heavy AI spending plans
Amazon reported third quarter earnings of $1.89 per share and revenues of $201.94 billion, slightly below expectations. AWS revenue grew 39.3 percent year over year to $46 billion. CEO Andy Jassy expects AWS growth to exceed 40 percent in 2027 and 2028. Amazon plans about $220 billion in capital spending in 2026, mostly for AWS infrastructure.
Amazon increases AI spending while cloud business grows faster
Amazon's cloud computing growth did not fully ease investor worries about rising artificial intelligence costs. The company expects to spend $220 billion on capital expenditures. Much of this spending will go toward building AI data centers, including the Amazon Web Services IAD10 facility in Sterling, Virginia.
LG CNS sees higher sales and profit from AI and cloud growth
LG CNS reported third quarter sales of 1.6643 trillion won and operating profit of 138.2 billion won. Sales rose 9.3 percent and operating profit rose 15 percent compared with last year. AI and cloud revenue reached 961.5 billion won, making up over half of total sales. The company also invested about 380 billion won in GPUs for AI infrastructure.
AI dubbing company Flawless sells technology to Steven Schuurman venture
Flawless sold its TrueSync dubbing technology and DeepEditor AI post-production tool to TBellScout, a startup owned by Steven Schuurman. Flawless Holdings Limited filed for administration earlier in October. The company raised $100 million from wealthy individuals rather than venture capital. Its tools have been used on many Hollywood productions including the film Fall.
UK defense leaders say risk appetite slows AI and quantum adoption
Speakers at the City Quantum and AI Summit in London said UK defense adoption of AI and quantum technology is held back by institutional risk taking culture. Admiral Sir Tony Radakin said business cases over 200 million pounds take more than 1000 days on average. Experts from Helsing and others said the issue is about empowering people to take risks rather than changing rules.
Anthropic AI fluency courses used by over 1.1 million people
Anthropic's AI fluency courses have been used by more than 1.1 million people. The courses were co-created by Rick Dakan from Ringling College and Joseph Feller from University College Cork. The University of Texas at Austin is also introducing an AI tutor based on a 4D Framework through Canva. The training is free and available to a wide audience.
FIRME system improves investor knowledge matching in financial AI
Researchers introduced FIRME, a registry-anchored memory graph that helps financial AI systems track investor knowledge across sources and time periods. FIRME reconciles incoming observations to persistent relationships and keeps source, time, and context details. Tests on investor-call records and S&P 500 earnings-call transcripts showed Correct Match Rate gains of 7.8 to 12.1 percentage points. Human audits also found large improvements in reattachment recall.
Google tests clearer labels for sponsored and organic products in AI Mode
Google is testing a new layout in AI Mode that separates sponsored products from organic products using section headers. Sponsored listings are labeled as paid, while another section shows all products. Google confirmed the change is part of ongoing ad experiments in AI Mode. The update only changes how results are grouped and does not add new ad formats or placements.
Dartmouth provost loses job after undisclosed AI use
Dartmouth College provost Joseph Helble was placed on administrative leave after using AI tools for job tasks like email and calendar management. He had publicly warned about AI cheating but did not disclose his own AI use to the administration. The incident has sparked debate about AI accountability among college administrators. Dartmouth said it takes AI use seriously and is committed to consistent policies.
Sources
- After Alphabet Rout, Amazon Tests The AI Trade. Here's Why Indian IT Is Watching
- Amazon Discloses Q3 Results as Massive AI Investment Drags Down Free Cash Flow
- AWS grows by nearly 40 percent, but AI investments put pressure on cash flow
- AMZN Stock Drops 7% As AI Spending Soars Past Expectations, While E-Commerce Growth Cools
- Amazon Stock Takes a Beating, but Munster Sees AI Powerhouse, Jim Cramer Calls Earnings ‘Very, Very Good’
- AMZN Q3 Earnings Call Highlights AWS Growth and AI Spending
- Amazon ramps up AI spending as cloud growth accelerates
- LG CNS raised both sales and operating profit in the third quarter thanks to the growth of artificia..
- AI Dubbing Pioneer Flawless Sells Tech To Steven Schuurman Venture
- Speakers Point to Risk Appetite And Capital as UK Deep-Tech Bottlenecks at City Quantum & AI Summit
- Anthropic AI fluency courses reach 1.1m users | ETIH EdTech News
- FIRME: Registry-Anchored Memory Graphs for Evolving, Heterogeneous Investor Knowledge
- Google AI Mode Tests Clearer Labels for Sponsored Ads 2026
- Dartmouth's provost warned us about AI cheating—but his own AI use cost him his job
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