The company's heavy push into artificial intelligence drove free cash flow down to negative $42.4 billion over the trailing 12-month period, reversing a positive $14.8 billion balance from the prior year. Despite this strain, the cloud division showed exceptional strength, generating $45.98 billion in revenue and achieving a 39% year-over-year sales surge. Management plans to maintain this aggressive outlay with full-year 2026 cash capital expenditures targeted at roughly $220 billion. This ambitious spending plan arrives just as fourth-quarter net sales are projected to land between $240 billion and $247 billion.
Projected 2026 capital expenditures of $220 billion will rival total revenue from the upc…: Projected 2026 capital expenditures of $220 billion will rival total revenue from the upcoming holiday quarter.
Cloud operating performance remains exceptionally strong despite broader company misses a…: Cloud operating performance remains exceptionally strong despite broader company misses across top and bottom lines.
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Amazon reported its third-quarter earnings on Thursday and missed analysts’ expectations for both its total revenue and earnings per share. There were other murky numbers in the report that scared investors, too, including how much cash the company is burning through.
But the report did have a big, bright spot: its cloud unit, Amazon Web Services, beat revenue expectations and grew a whopping 39% compared to the year-ago quarter.
Here are the numbers:
- Net sales increased 12% to $201.9 billion. But analysts were expecting $202.2 billion, according to FactSet.
- Fully diluted earnings per share were $1.89. Analysts were expecting $1.97.
- AWS sales reached $45.98 billion. Analysts were expecting $45.29 billion. In addition, Amazon said that AWS operating income grew to $17.8 billion, compared with $11.4 billion in the third quarter of 2025.
But here’s the biggest ouch of the report: Free cash flow fell to a negative of $42.4 billion for the trailing 12 months — meaning the company was spending far more cash than it generated. This compares to positive free cash flow of $14.8 billion…
The pharmaceutical giant adjusted its medium-term financial projections upward to reflect stronger expectations for its broader portfolio. Meanwhile, federal health officials have targeted the flagship HIV medication for substantial government price reductions later this decade. These impending regulatory discounts will reshape the drugmaker's long-term revenue profile under federal healthcare programs.
Alphabet's aggressive push into artificial intelligence has begun cannibalizing its primary moneymaker by curbing the volume of advertisements sold through standard search queries. Massive capital expenditures dedicated to funding these advanced technologies triggered a rare quarterly cash deficit, intensifying investor panic over whether big tech firms can monetize AI before eroding their established profit centers.
The tech giant faced an after-market stock drop exceeding 6% after posting lower net income and trailing quarterly revenue projections. While massive capital spending on artificial intelligence continues to pressure profits, the company is ramping up operations ahead of the holiday shopping season. Markets are scrutinizing whether these multi-billion-dollar investments will deliver sustainable returns amidst high infrastructure costs.