Amazon misses on sales and profit but keeps its $220bn capex plan unchanged

Revenue of $201.94bn fell short of the $206.29bn forecast, yet Andy Jassy points to AWS growth above 40% in 2027 and 2028 to justify the spending.

Amazon missed Wall Street's third-quarter targets on both sales and earnings, and did not cut its spending by a dollar: it still plans about $220bn of cash capital expenditure in 2026. Revenue came in at $201.94bn against the $206.29bn expected, and earnings per share of $1.89 were $0.11 below forecast.

The gap between a weaker top line and an unchanged cheque is the story. Andy Jassy, the chief executive, makes the case for it in one place only. He says AWS, the cloud arm, is growing revenue more than 39% a year and will grow above 40% in both 2027 and 2028. The whole build-out now rests on that forecast, which is management's own and has yet to be tested by the demand it assumes.

The fourth-quarter guidance gives the bet less cover than it might. Amazon expects sales of $240.0bn to $247.0bn, growth of 12% to 16% on a year earlier. That is a wide range, and it follows a quarter that fell short of the market's bar. Operating income is guided to $28.5bn to $33.5bn, against $25.0bn a year ago, so margins are holding up and softening the blow for now.

But cost discipline can only offset so much. If sales keep missing while spending stays at this level, the question for investors is how long the cloud forecast can carry a commitment of this size. Among the deals tied to the build-out is the 3M warrant arrangement of October 19, which shows the spending is running on its own timetable, whatever retail is doing.