Amazon Stock Falls Despite 40%-Plus AWS Growth Outlook Through 2028

What happened

Amazon shares fell 6.31% in premarket trading after third-quarter earnings per share of $1.89 missed the $1.97 consensus and revenue of $201.9 billion fell short of the $202.2 billion estimate, even as AWS sales rose 39% to $46.0 billion.

Confirmed

Global impact / market context

The miss matters because Amazon is spending heavily to expand AWS, and free cash flow turned negative $42.4 billion as property and equipment purchases jumped $94.8 billion. That ties up cash available for other uses, while debt rose sharply to $173.1 billion from $65.6 billion.

Analyst inference

Investors face a company growing revenue 12% with record operating income of $28.1 billion, yet punished for missing profit and sales estimates. Heavy capital spending of about $220 billion this year and more planned for 2027 signals that cash generation, not just growth, is now central to the stock.

Analyst inference

What to watch

1. Amazon guided fourth-quarter revenue to $240 billion to $247 billion and operating income to $28.5 billion to $33.5 billion, figures investors can compare against actual results when reported. Confirmed
2. Watch whether Amazon's projected AWS revenue growth above 40% in 2027 and 2028 arrives as promised, since slower growth would undercut the case for its large capital spending. Proposed
3. Track whether free cash flow returns to positive and debt stops climbing, because continued cash outflows and rising borrowed money could limit Amazon's financial flexibility. Analyst inference

Evidence

• gurufocus.com