Amazon juggernaut continues hauling in more cash despite recent bad news

The spending will continue until AI revenue improves

Despite a trickle of bad news from Amazon in recent weeks, the company's business is thrumming along, with AWS leading the way.

Amazon reported earnings for its third quarter on Thursday and investors were tickled, sending the stock up more than 13 percent after hours. The company beat on most metrics, and posted 20 percent revenue growth in its AWS cloud computing business, which delivered $33 billion in sales.

"Customers want to be running the core and AI workloads in AWS, given its stronger functionality, security, and operational performance," said CEO Andy Jassy on the earnings call, without mentioning outages in each of the last and two weeks. "And the scale I see in front of us gives me significant confidence in what lies ahead."

As points of comparison, Google Cloud reported Q3 2025 revenue of $15.2 billion, a 34 percent increase year over year. Microsoft Intelligent Cloud (which includes Azure and other segments) for fiscal Q1 2026 reported $30.9 billion in revenue, an increase of 28 percent. Azure and other cloud services revenue within the Intelligent Cloud segment increased 40 percent, with no specific dollar figure provided.

So AWS is growing at a healthy clip, but not as quickly as Azure and Google Cloud. That's long been the case, as AWS is growing from a larger base.

Amazon's earnings bonanza [PDF] follows the company's recently announced decision to cut 14,000 jobs, at a cost of "$1.8 billion in estimated severance costs primarily related to planned role eliminations."

Speaking on the company's earnings call, Jassy said the job cuts were not related to AI – at least right now. Rather, he said, Amazon cut jobs to normalize and harmonize company culture that has drifted in the wake of numerous acquisitions.

Amazon also saw its free cash flow fall to $14.8 billion, compared to $47.8 billion in Q3 2024, "driven primarily by a year-over-year increase of $50.9 billion in purchases of property and equipment, net of proceeds from sales and incentives."

In other words, Amazon is spending quite a bit on AI infrastructure. Capital expenditures for the quarter came in at $34.2 billion, with the company's 2025 capex expected to hit $125 billion, up from estimates earlier this year of around $100 billion. And 2026 capex is expected to be higher still, which is not entirely surprising given projects like the company's $10 billion commitment to build a data center in Richmond County, North Carolina.

"AWS is where the preponderance of companies' data and workloads reside and part of why most companies want to run AI in AWS," Jassy said. "To enable customers to do so, we need to have the requisite capacity, and we've been focused on accelerating capacity the last several months, adding more than 3.8 gigawatts of power in the past twelve months, more than any other cloud provider. To put that into perspective, we're now double the power capacity that AWS was in 2022, and we're on track to double again by 2027."

Amazon's AI investment isn't entirely punch-drunk spending. The company reported pre-tax gains of $9.5 billion that have been rolled into its non-operating income from its investments in Anthropic. Amazon initially invested $8 billion in Anthropic in 2023 and 2024, a commitment valued at $13.8 billion in May.

Amazon during the quarter launched Project Rainer, an AI compute cluster populated by 500,000 Trainium2 chips that Anthropic is using to build and deploy its Claude model family.

So money invested in Anthropic should flow back to AWS as compute fees. It's the circle of venture capital life. ®