Amazon is set to report third-quarter earnings after the closing bell on Thursday, with investors focused squarely on whether accelerating growth at Amazon Web Services can justify the company’s rapidly rising artificial-intelligence infrastructure spending. Wall Street expects revenue of about $202 billion, up 12% year over year, while earnings per share estimates range from $1.97 to $2.01, compared with $1.95 a year earlier.
The year-ago period included roughly $4.3 billion in one-time charges tied to severance costs and a settlement with the U.S. Federal Trade Commission. This quarter, gains or losses on Amazon’s stakes in OpenAI and Anthropic could also influence the bottom line.
AWS is the main event. Analysts expect cloud revenue to grow about 37% to roughly $45 billion, with Visible Alpha consensus estimates at $45.4 billion. AWS growth has accelerated for five consecutive quarters, and last quarter’s 37% expansion was the fastest in 18 quarters. The division is expected to post an operating margin near 38%, or 37.3% in consensus, up from 35% last quarter and 34.2% in April. That would generate about $17 billion in operating income, roughly two-thirds of Amazon’s total. AWS CFO John Felton recently said AI spending is paying off, and AWS became the first cloud provider to win NATO-wide approval to handle the alliance’s restricted workloads.
Retail results are expected to cool. Prime Day was moved into the second quarter to avoid a clash with the FIFA World Cup in July, so third-quarter retail sales growth is forecast to slow to 5% from 15% in the previous quarter. Advertising revenue is also facing a tough comparison. North American revenue estimates have edged down to about $113.8 billion, and the North American retail operating margin is expected to reach 6.8%, though estimates have declined by roughly 50 basis points since last quarter amid inflation and tariff concerns.
The spending question remains central. Amazon spent $132 billion on capital expenditure last year and has projected about $220 billion for 2026, leaving roughly $120 billion for the second half. Capex has exceeded Amazon’s record operating cash flow for two straight quarters. The company added $78 billion in debt in the nine months through June and about $30 billion more in the third quarter. Unlike Alphabet and Meta Platforms, Amazon has not sold equity. Seeking Alpha consensus estimates show hyperscaler capital expenditure across the sector reaching $762 billion in 2026, more than double the $362 billion in 2025, before rising to $1.3 trillion in 2027.
Amazon’s relationship with Anthropic is also in focus after the AI startup’s IPO prospectus mentioned Amazon and AWS 166 times. Anthropic has a $110 billion, 10-year AWS contract, and Amazon is described as a competitor, distributor, customer, vendor and shareholder in the startup, with a stake expected to exceed 5% after the IPO. Morgan Stanley raised its Amazon price target to $350 from $335 and named the stock a top pick. Amazon shares have risen 12.3% year to date, broadly in line with the S&P 500, with a consensus price target of $336 implying about 35% potential upside.
No major cryptocurrency tokens are directly tied to Amazon’s earnings, though the results may influence broader risk sentiment across tech and growth assets.
