Amazon misses Q3 targets, offers cautious holiday-quarter outlook

AWS sales rose 39.3%, fastest growth in nearly five years

Amazon reported fiscal third-quarter results that came in below Wall Street analysts’ expectations and offered a cautious sales outlook for the fourth quarter, the period that spans the critical holiday shopping season. Shares fell more than 5% in after-market trading when the results were released, as investors focused on the core business.

Amazon posted strong sales growth in its prominent cloud computing unit, Amazon Web Services. AWS sales rose 39.3% in the quarter ended Sept. 30, higher than the 37% growth rate in the previous quarter and the fastest pace in nearly five years, Amazon said.

Amazon reported net income of $20.69 billion, or $1.89 per share, in the three-month period, compared with $21.19 billion, or $1.95 per share, in the year-ago period. Net sales rose 12% to $201.94 billion from $180.17 billion a year earlier. Analysts had expected earnings of $1.97 per share on sales of $202.2 billion, according to FactSet.

Amazon said sales were hurt by a shift in the calendar for its Prime Day sales event, which fell in the second quarter this year for most large countries. In 2025, Prime Day occurred entirely during the fiscal third quarter. Excluding the shift, third-quarter year-over-year sales growth would have been approximately 400 basis points, or 4%, higher, Amazon said.

For the fourth quarter, Amazon said it expects net sales of between $240 billion and $247 billion, a 12% to 16% increase compared with the year-ago period. Analysts were expecting $244.16 billion.

Analysts will be looking for any comments from Amazon executives on the earnings call Thursday about the holiday shopping season. Amazon said earlier this month that it would hire 300,000 U.S. seasonal workers for the shopping period, up from 250,000 last year.

Investors have been closely watching Amazon’s quarterly earnings to see whether the company’s big spending on artificial intelligence is starting to pay off. Chief Executive Andy Jassy disclosed to investors in July that Amazon now expects capital spending, mostly in artificial intelligence, to total $220 billion, including outlays on robots, semiconductors and satellites. That is up from the $200 billion investment plan announced in February and well above the $128 billion in capital spending for all of last year. Jassy cited the higher cost of memory chips as the main reason for the increase, and he told investors this past summer that even at the $220 billion level, Amazon will not have enough capacity to meet all of the demand it has this year.

The latest earnings report from Alphabet late Wednesday raised alarm bells when it reported weaker growth for the summer than analysts expected. The company behind Google and YouTube also said it burned through more cash during the latest quarter, according to a measure called free cash flow, after its purchases of property and equipment topped $51 billion. Its stock plummeted Thursday. Such worries are weighing on the entire AI industry following a big push to build data centers and fill them with AI chips.