Amazon Q3 Misses Revenue and EPS Estimates as Free Cash Flow Turns Negative on AI Spending

Amazon reported third-quarter earnings on Thursday that missed analysts' expectations for both total revenue and earnings per share, while free cash flow turned sharply negative, unsettling investors. The company's cloud unit, Amazon Web Services, was the bright spot, beating revenue expectations with 39% growth from the year-ago quarter. But free cash flow fell to negative $42.4 billion for the trailing 12 months, compared with positive free cash flow of $14.8 billion for the trailing 12 months ended September 30, 2025. Amazon attributed the heavy spending largely to AI investments and reiterated its expectation of about $220 billion in cash capital expenditures for the full year, with one quarter left in its fiscal year. The company forecast fourth-quarter net sales of between $240 billion and $247 billion, meaning annual capex will approach the revenue it expects in the holiday quarter alone.