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Amazon (NASDAQ:AMZN | AMZN Price Prediction) will be reporting third-quarter results soon after the market closes today, October 29. Shares are down 6.01% over the past week, and AI spending is coming under fire heading into tonight’s release.
AWS Momentum Meets a Cash Flow Bill
Amazon’s Q2 revenue reached $200.6 billion, up 20%, while operating income rose 43% to $27.5 billion. AWS revenue of $42.2 billion marked its fastest growth in 18 quarters, with a $496 billion backlog. GAAP EPS of $5.75 included a $53.4B non-operating gain linked largely to Anthropic.
Shares gained 4.58% the day following Q2 earnings, then slid 6.13% over 30 days. The stock is up 6.84% year to date but down 3.14% in today’s session. Management raised its 2026 cash capex plan in July, citing higher memory costs.
Amazon’s Consensus Estimates Reflect a Prime Day Shift
| Metric |
Q3 2026 Estimate |
YoY Change |
FY 2026 Estimate |
FY 2027 Estimate |
| Revenue |
$202.2B |
+12.2% |
$828.7B |
$950.0B |
| EPS (Normalized) |
$1.9579 |
+0.4% |
$12.9069 |
$10.5588 |
Revenue consensus lands at the top of guidance. Flat EPS growth shows a tough comparison, since Q3 2025 included $9.5 billion in pre-tax Anthropic gains. The FY 2027 EPS estimate trails FY 2026 because this year’s figure carries those one-time investment gains.
What to Watch Tonight: AWS Capacity, Custom Chips and Ads
Here are some of the items I’m watching in tonight’s earnings report:
- AWS growth and margins. CEO Andy Jassy has said that even record spending leaves AWS short of capacity in 2026, adding, “I think we’re still in the relative early stages of how much demand there’s going to be for AI.” The key question is whether the 39% operating margin holds, since the CFO noted margins vary with AI mix.
- Custom silicon. AI and chips revenue run rates each exceeded $25 billion, and Anthropic and OpenAI made multi-gigawatt Trainium commitments. Analysts will be listening for any update on selling Trainium outside AWS.
- Capex and free cash flow. Investors are going to focus on whether the 2026 capex plan moves again and how management frames 2027 spending.
- Advertising and retail. Ads revenue rose 26% to $19.8 billion. I’m also going to be watching the 7.9% North America margin against fuel and line-haul costs.
Amazon’s Post-Earnings Track Record
| Quarter |
EPS Surprise |
1-Day Move |
7-Day Move |
30-Day Move |
| Q2 2026 |
+215.47% |
+4.58% |
+1.07% |
-6.13% |
| Q1 2026 |
+68.18% |
+1.21% |
+2.31% |
-3.22% |
| Q4 2025 |
-0.49% |
-0.76% |
-5.48% |
+1.11% |
| Q3 2025 |
+25.19% |
+4% |
+0.08% |
-4.85% |
On average, shares moved -0.505% within seven days of earnings over the past year.
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