Amazon's Q3 came with a record margin and AWS up 39%. It also came with a $77.3 billion receipt.

Amazon reported its third quarter after the market closed on Thursday, October 29. The good part of the box was very good. The receipt is what investors read.

What was in the box. Per Amazon's results release:

• AWS sales grew 39% (39.3%) to $46.0 billion, its fastest growth in nearly five years, for a $184 billion annualized run rate. AWS operating income was $17.8 billion, up from $11.4 billion.
• Operating income was $28.1 billion, and the 13.9% operating margin is Amazon's highest ever.
• Total sales grew 12% to $201.9 billion. Amazon says Prime Day moved into Q2 this year, and that growth would have been about 4 points higher without that shift.
• CEO Andy Jassy said AWS is projected to grow more than 40% in both 2027 and 2028, and that "there has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years."

What was on the receipt.

• Purchases of property and equipment were $77.3 billion in the quarter, up from $35.1 billion a year earlier. CNBC, citing FactSet, says analysts expected about $58.7 billion.
• Free cash flow for the last 12 months was an outflow of $42.4 billion, compared with an inflow of $14.8 billion a year earlier. Amazon says this "primarily reflects investments in artificial intelligence."
• Amazon still expects about $220 billion of cash capital expenditures in 2026.
• Earnings were $1.89 a share, versus $1.96 expected (LSEG, via CNBC); revenue of $201.94 billion was just under the $202.31 billion estimate. Fourth-quarter sales guidance is $240 billion to $247 billion.

The stock. Reuters reported that Amazon shares closed at $243.79 in regular trading, down 4.3%. At 3:30 p.m. Pacific time, a live quote showed $227.92 in after-hours trading, about 6.5% below that close. After-hours prices move quickly and can change before the next session.

Our take. This is the same story the market has been telling all week about the biggest AI spenders: growth is real, and so is the bill. AWS growing 39% at a $184 billion run rate is a strong answer to the "is AI demand real" question. Spending $77 billion in a quarter, and running more than $40 billion of negative free cash flow over a year, is the question investors are asking now: when does the cash come back?

$AMZN. Not investment advice. Not tested by MODEL: this is a summary of Amazon's release and news reports, read on October 29, 2026.