Anthropic · Microsoft · Amazon · Meta · Wall Street · Fortune Technology
Amazon shares sink as spending on AI overshadows growth in cloud unit
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Amazon’s cloud computing unit is growing steadily, keeping pace with AI demand, but the e-commerce giant’s massive spending on AI data centers and weaker advertising performance are worrying investors.
Key facts
- On Thursday, Amazon said its quarterly capital expenditures totaled $75.9 billion and reiterated that it expects its 2026 capital spending to be about $220 billion
- For the current quarter, Amazon said it expects sales between $240 billion and $247 billion and operating income between $28.5 billion and $33.5 billion
- According to Anthropic’s IPO filing, Amazon has invested about $18 billion in Anthropic and committed to invest up to another $15 billion
- Amazon Web Services, the cloud unit, saw third-quarter sales rise 39.3% to $45.98 billion, topping Wall Street targets and marking its fastest growth in years
Summary
Amazon on Thursday reported third-quarter revenue of $201.9 billion, slightly missing expectations. Amazon Web Services, the cloud unit, saw third-quarter sales rise 39.3% to $45.98 billion, topping Wall Street targets and marking its fastest growth in years. The results showed that demand for Amazon’s cloud services, particularly those tied to AI, remains high. “This is a once-in-a-lifetime opportunity,” Amazon Chief Executive Andy Jassy said in a call with analysts, defending the company’s capital spending.