Key Highlights

● Amazon closed at $240.35 on Friday, October 30, 2026, after a steep premarket drop.

● Trailing 12-month free Cash Flow fell to negative $42.4 billion.

● Revenue of $201.9 billion was just short of estimates.

● Fourth-quarter sales guidance of $240 billion to $247 billion trailed forecasts.

Amazon (NASDAQ:AMZN) fell on Friday, October 30, 2026, closing at $240.35 after its third-quarter results put the cost of the AI buildout front and center. The online retail and cloud giant reported trailing 12-month free cash flow of negative $42.4 billion, compared with positive $14.8 billion a year earlier, as Capital spending on data centers and AI infrastructure surged.

The stock had been down far more steeply before the opening bell but trimmed its losses during the session. It still contributed to a heavy day for the Dow Jones Industrial Average, which lost 572.25 points to close at 51,770.31.

Inside the quarter

Amazon's headline numbers came in just short of expectations. Revenue was $201.9 billion against estimates of about $202.2 billion to $202.3 billion, and Earnings were $1.89 a share against $1.96 to $1.97. Guidance for the fourth quarter also trailed forecasts: sales of $240 billion to $247 billion, against a $244.5 billion estimate, and Operating Income of $28.5 billion to $33.5 billion, a range centered below the $32.99 billion consensus.

Spending was the bigger story. Amazon held its 2026 Capital Expenditure plan at about $220 billion and signaled that 2027 spending would be "meaningfully more". Its cloud unit, Amazon Web Services, grew strongly to $45.98 billion in revenue and reported a $578 billion backlog, while Advertising growth slowed.

"On the CapEx involved to grow the way we're talking about, it's meaningful," CEO Andy Jassy said.

Wall Street splits on the outlook

Analysts moved in both directions. Cantor Fitzgerald cut its price target to $280 from $310 while keeping an Overweight rating, Citizens cut to $275 from $315, TD Cowen trimmed to $340 from $350, and BofA lowered to $317 from $320. On the other side, MoffettNathanson raised its target to $357 from $315, UBS (NYSE:UBS) to $352 from $348, and Mizuho (NYSE:MFG) to $335 from $330.

The AI-spending backlash

Amazon's report landed in a market already uneasy about the cost of artificial intelligence. Alphabet (NASDAQ:GOOGL) suffered its worst day ever on Thursday after reporting negative free cash flow of $9.1 billion, and Meta (NASDAQ:META)'s prior report showed its first negative quarterly free cash flow since 2012. Intel (NASDAQ:INTC)'s cash-burn warning set off a chip rout on Friday that dragged the Philadelphia Semiconductor index down to 10,688.80.

"Together, Amazon, Google, Microsoft (NASDAQ:MSFT) and Meta spent more than $200bn in the third quarter alone," said a market analyst. A trading specialist said: "A lot of them kind of got ahead of themselves. It's all earnings based and right now, they're not producing".

The S&P 500 fell 140.32 points to 7,580.07, and the Nasdaq Composite dropped 747.73 points to 25,437.00, its worst day since June 5. Investors rotated into energy, consumer staples, health care and utilities. Walmart (NASDAQ:WMT), Amazon's biggest retail rival, rose on the Dow.

What to watch

The key question for Amazon is how quickly its spending translates into cash. Investors will watch for more detail on the 2027 capital plan and whether AWS growth and its Backlog can offset the drag on free cash flow.

The wider calendar is busy. Apple (NASDAQ:AAPL) reports on Monday, November 2, the midterm elections are Tuesday, November 3, and the October jobs report arrives Friday, November 6. The Federal Reserve held rates steady this week, but futures point to a likely December hike. The analyst warned that "the risk is that higher financing costs will absorb more of the cash generated".