Amazon reported Q3 2026 net sales of $201.9 billion, a 12% increase year-over-year that fell just short of Wall Street consensus expectations of approximately $202.1 billion to $202.3 billion. The e-commerce giant also reported earnings per share (EPS) of $1.89, missing the analyst forecast range of $1.96 to $2.01.
While the consolidated revenue missed targets, Amazon Web Services (AWS) accelerated its growth. The cloud unit’s revenue climbed 39% year-over-year to $46.0 billion, surpassing the $45.3 billion anticipated by analysts. This cloud performance contributed to a record-high consolidated operating margin of 13.9%. Total operating income reached $28.1 billion, significantly exceeding the $26.1 billion projected by analysts.
Advertising and Retail Performance
The company’s advertising services revenue reached $19.64 billion, up 12% year-over-year. However, this figure missed the internal and analyst forecast of $20.82 billion. The retail business faced a difficult year-over-year comparison due to the timing of Prime Day. In 2025, the event occurred entirely in the third quarter, but in 2026, the promotion shifted to the second quarter for most major markets. Analysis of the results suggests this timing anomaly lowered reported Q3 growth by roughly 400 basis points.
Net income for the quarter decreased to $20.7 billion, down from $21.2 billion in the same period last year. This decline was largely attributed to a one-time $9.5 billion pre-tax gain from investments in Anthropic recorded in the prior-year quarter, which created an unfavorable year-over-year comparison for the current period.
Capital Expenditures and Q4 Outlook
Amazon is significantly increasing its investment in artificial intelligence infrastructure. The company’s full-year 2026 capital expenditures are now projected to reach approximately $220 billion, driven primarily by AI-related hardware and memory costs.
For the upcoming holiday quarter, Amazon issued revenue guidance between $240 billion and $247 billion. This range sits slightly below the consensus midpoint as the company prepares for a competitive retail environment. Despite the revenue miss and the shift in retail timing, the company’s ability to drive record operating income suggests continued efficiency gains in its fulfillment network and the high-margin AWS segment.
