Amazon has increased its headcount by 60,000, and AWS cloud orders have accumulated to 3.85 trillion.

Reported by Zhidx on October 30, in the early hours of today, Amazon released its 2026 Q3 financial report. In this quarter, the revenue of Amazon Web Services (AWS) reached 46.002 billion USD (about 3.064 trillion RMB), a year-on-year increase of 39.3%, hitting the fastest growth rate in the past five years; AWS operating profit reached 17.782 billion USD (about 1.184 trillion RMB), up 56% year on year.

In this quarter, Amazon's total revenue reached 201.944 billion USD (about 1.34 trillion RMB), up 12% year on year; operating profit hit 28.076 billion USD (about 187 billion RMB), a year-on-year increase of 61%; net profit stood at 20.685 billion USD (about 137.8 billion RMB), down 2.4% year on year; diluted earnings per share was 1.89 USD (about 12.59 RMB). The decline in net profit was mainly affected by the equity investment income from Anthropic recorded in the same period last year.

Amazon's revenue and growth performance in the past 3 years (Chart by Zhidx)

As of September 30, Amazon's free cash flow over the past 12 months recorded a net outflow of 42.4 billion USD (about 282.4 billion RMB), further expanding from the 7.6 billion USD (about 50.6 billion RMB) net outflow disclosed in the previous quarter, while it was a net inflow of 14.8 billion USD (about 98.6 billion RMB) in the same period last year.

Amazon estimates that its cash capital expenditure in 2026 will be about 2200 billion USD (about 1.47 trillion RMB), most of which will be invested in AWS.

During the earnings call, Andy Jassy, CEO of Amazon, stated that considering the growth opportunities of AWS in the next two years, the capital expenditure in 2027 will be significantly higher than this year. He also hopes to develop AWS into a business with an annual revenue scale of 1 trillion USD (about 6.66 trillion RMB) within 5 to 10 years. At present, the annualized run rate of AWS revenue is 184 billion USD (about 1.23 trillion RMB).

As of the end of the third quarter, Amazon has a total of 1.638 million full-time and part-time employees, excluding contract workers and temporary staff, up 4% year on year, with an increase of about 60,000 people.

As of the close of trading on October 29 Eastern Time, Amazon's share price was at 243.79 USD per share (about 1624 RMB per share), down 4.25% from the previous trading day. After the financial report was released, as of 20:00 on October 29 Eastern Time, the after-hours share price fell to 226.00 USD per share (about 1505 RMB per share), with a drop of about 7.30%.

Amazon's share price on October 29 Eastern Time

While overseas tech giants are increasing their AI investment, their cash flow has also come under pressure, leading to obvious fluctuations in the share prices of related companies.

Yesterday, Alphabet, the parent company of Google, released its financial report. Its capital expenditure in the third quarter reached 51.4 billion USD (about 342.3 billion RMB), which was mainly invested in AI infrastructure, and its free cash flow was -9.1 billion USD (about -60.6 billion RMB).

On October 29 Eastern Time after the financial report was released, Google's Class A share price fell 12.64% to 283.82 USD per share, marking the largest single-day drop in history, and its market value evaporated by about 5000 billion USD (about 3.33 trillion RMB).

Microsoft's capital expenditure in the same period reached 45.2 billion USD (about 301 billion RMB), but it still maintained a free cash flow of 18.6 billion USD (about 123.9 billion RMB), and the market reaction was relatively stable. Its share price fell 0.16% to 530.14 USD per share on October 29 Eastern Time.

01. AWS revenue increased by 39% year on year, all three major business segments achieved growth

The financial report shows that Amazon's North American business revenue in the third quarter reached 112.852 billion USD (about 751.6 billion RMB), up 6% year on year; international business revenue reached 43.067 billion USD (about 286.8 billion RMB), up 5% year on year; AWS revenue reached 46.002 billion USD (about 306.4 billion RMB), up 39.3% year on year.

Revenue proportion of each main business of Amazon in 2026 Q3 (Chart by Zhidx)

In terms of profitability, the operating profit of North American business was 8.723 billion USD (about 58.1 billion RMB), the operating profit of international business was 1.616 billion USD (about 10.8 billion RMB), and the operating profit of AWS was 17.782 billion USD (about 118.4 billion RMB). Amazon's overall operating profit margin rose to 13.9%, hitting a record high.

Amazon stated that the Prime Day in the third quarter was moved forward to the second quarter in most major countries such as the United States, which caused the retail and advertising businesses in this quarter to be affected by the time dislocation. Excluding the time change of Prime Day, the year-on-year growth rate of global sales in the third quarter would be about 4 percentage points higher.

During the earnings call, Andy Jassy, CEO of Amazon, stated that the annualized run rate of AWS revenue has reached 184 billion USD (about 1.23 trillion RMB), and the backlog of orders reached 5780 billion USD (about 3.85 trillion RMB). Amazon currently deploys one AI accelerator approximately every 14 seconds, and the newly added computing power is almost consumed by customers immediately after deployment is completed.

Jassy also mentioned that about 85% of global IT expenditure is still deployed in on-premise environments, and the migration of enterprises to the cloud may last for 10 to 20 years. Amazon expects that the revenue growth rate of AWS in 2027 and 2028 may both exceed 40%, and it hopes to develop AWS into a business with an annual revenue scale of 1 trillion USD within 5 to 10 years.

02. Bedrock call volume increased 17 times, AgentCore and self-developed chips accelerate implementation

Amazon stated that the expenditure of Fortune 500 companies on Amazon Bedrock in the third quarter increased by nearly 7 times year on year, and the total Token call volume of Bedrock increased by nearly 17 times year on year. Bedrock has accessed multiple types of foundation models, providing enterprises with capabilities including model calling, fine-tuning, security control and application development.

Bedrock AgentCore is also expanding rapidly. Tens of thousands of customers are already using AgentCore, and the number of Agents deployed through this platform in the third quarter is twice the sum of that in the previous three quarters. Amazon hopes to help enterprises deploy AI Agents that can call tools, perform tasks and connect to business data through AgentCore.

During the earnings call, Jassy stated that there may be 6 to 8 mainstream models with comparable capabilities in the market in the next 2 to 3 years, and enterprises will combine different models according to their demands for reasoning, programming, vision, latency and cost. Amazon believes that the value of Bedrock lies in providing multi-model selection, unified security control and low usage cost.

In terms of chips, Trainium and Graviton continue to expand their applications. Amazon stated that customers using self-developed chips saved more than 2 billion USD (about 13.3 billion RMB) in the third quarter; Graviton has a 30% to 40% cost performance advantage over some x86 solutions. Amazon plans to start selling Trainium chips to customers outside AWS by the end of 2027.

03. Capital expenditure is expected to reach 1.47 trillion RMB, net outflow of free cash flow expands

As of September 30, Amazon's cash flow from operating activities over the past 12 months reached 168.3 billion USD (about 1.12 trillion RMB), up 29% year on year; but its free cash flow recorded a net outflow of 42.4 billion USD (about 282.4 billion RMB), while it was a net inflow of 14.8 billion USD (about 98.6 billion RMB) in the same period last year.

The expansion of net outflow of free cash flow is mainly related to the increased investment in AI infrastructure. Over the past 12 months, Amazon's equipment procurement expenditure increased by 94.8 billion USD (about 631.4 billion RMB) year on year, which was mainly used for the construction of AI data centers, servers, network equipment and related infrastructure.

Amazon estimates that its cash capital expenditure in 2026 will be about 2200 billion USD (about 1.47 trillion RMB), most of which will be invested in AWS. During the earnings call, Jassy further stated that considering the growth opportunities of AWS in the next two years, the capital expenditure in 2027 will be significantly higher than this year.

For the fourth quarter, Amazon expects net sales to be between 240 billion USD and 247 billion USD (about 1.60 trillion RMB to 1.65 trillion RMB), up 12% to 16% year on year; operating profit is expected to be between 28.5 billion USD and 33.5 billion USD (about 189.8 billion RMB to 223.1 billion RMB). Amazon expects the year-on-year growth rate of advertising revenue in the fourth quarter to rebound to the range of high single digits to teens.

04. Conclusion: The rapid growth of AWS occurs simultaneously with heavy AI investment

Amazon's third-quarter financial report shows that AWS has become the core pillar of Amazon's profit growth and future valuation, while the retail business continues to improve in terms of distribution, advertising and operational efficiency.

However, the investment in AI data centers, servers and chips is also depressing free cash flow. In the next two years, whether AWS can maintain a growth rate of around 40%, and whether Trainium, Bedrock and AgentCore can convert computing power investment into stable revenue and cash flow, will determine how the market re-evaluates Amazon's AI investment.

This article is from the WeChat Official Account "Zhidx" (ID: zhidxcpm), author: Yang Jingli, editor: Li Shuiqing, published with authorization from 36Kr.