Amazon reports Q3 results with $202 billion revenue projected

Amazon is set to release its third-quarter earnings after the market close on Thursday. The company is expected to report adjusted earnings per share of $1.96. Total revenue is forecast at $202.31 billion, according to LSEG data.

Investors are closely watching the cloud segment, which is projected to generate $45.48 billion in sales. That figure would represent a 38 percent year-over-year increase. This marks the fifth straight quarter where Amazon Web Services revenue has accelerated. The advertising division is expected to bring in $20.82 billion.

CEO Andy Jassy stated that cloud capacity for next year is largely sold out. He noted that Amazon has also received substantial commitments for 2028. Jassy spoke on an Andreessen Horowitz podcast last week. He said, 'We always leave a certain amount for on demand and our inference service Bedrock or EC2, but largely sold out all the big chunks.'

The company raised its 2026 capital expenditure forecast to $220 billion last quarter. It had previously projected $200 billion. Analysts surveyed by StreetAccount believe spending will rise to more than $280 billion in 2027. This spending is driven by the construction of new data centers to handle AI computing demand.

The heavy investment has impacted cash flow. Amazon reported negative free cash flow of $7.6 billion for the trailing twelve months in July. That is a reversal from the positive $18.2 billion reported a year earlier. FactSet estimates the company will see an outflow of $9.9 billion in the current quarter. Alphabet and Meta also reported negative free cash flow in their recent results. Microsoft reported a 27 percent decline in free cash flow, though its figures remained positive.

Amazon has reduced its workforce while increasing AI spending. The company has cut more than 57,000 jobs since 2022. This represents roughly 16 percent of its corporate staff. The company confirmed it laid off fewer than 250 employees on Wednesday. These cuts affected the device software and services team. A spokesperson said the move was to operate more efficiently and align with the product roadmap.

Amazon has blocked third-party AI agents from accessing its site. The company stopped Meta’s Muse AI agent from shopping during the third quarter. Amazon said it did not receive advance notice and did not agree to participate. The company has also blocked dozens of other external agents. It sued Perplexity last year over allegations that the startup concealed its bots.

Amazon is developing its own shopping tools to compete. It rebranded its Rufus chatbot to Alexa for Shopping in May. The company stated that more than 400 million shoppers have used the assistant. Usage of agentic features has grown more than eight times since the start of the year. The tool now offers more than 100 capabilities, including gift list building and subscription management.

Deutsche Bank analysts noted that Amazon is well-positioned to develop its own agentic shopping offering. They wrote that the company’s proprietary purchase data is an advantage. The key question is whether Amazon can allow third-party agents to preserve monetization. Meta and OpenAI are pushing deeper into AI shopping tools, which may reduce reliance on Amazon’s sponsored ads.