EnterpriseAMZNOCT 31, 2026

Amazon’s AWS growth hits 39% as trailing cash outflow reaches $42.4 billion

The AI buildout is accelerating cloud revenue, but small-business buyers should separate capacity expansion from evidence of lower costs.

BY GRETA REINHART · ENTERPRISE SAAS

Amazon reported October 29 that third-quarter AWS sales rose 39% to $46.0 billion, its fastest growth in nearly five years, alongside a widening cash drain. For small-business buyers, the distinction is capacity versus cost: stronger cloud demand doesn’t establish cheaper AI services.

Amazon’s Q3 2026 Earnings Release put Amazon Web Services operating income at $17.8 billion, up from $11.4 billion a year earlier. Associated Press reported growth accelerated from 37% to 39.3%. Axios reported that Andy Jassy, CEO of Amazon, put AWS backlog at $578 billion, versus $496 billion at the second quarter’s end. Demand isn’t the missing ingredient.

Financing that demand is the tension. Reuters reported trailing-12-month negative free cash flow of $42.4 billion, compared with a $7.6 billion outflow in the prior quarter. TechCrunch reported a reversal from positive $14.8 billion a year earlier, with Amazon attributing spending increases largely to AI investments. Amazon maintained its expectation for approximately $220 billion in 2026 cash capital expenditures. Reuters put third-quarter capital expenditure at $77.26 billion, roughly $20 billion above LSEG estimates; Jassy’s phrase “meaningfully more” captures the spending posture.

The wider business offered less reassurance. TechCrunch reported companywide revenue grew 12% to $201.9 billion, below FactSet expectations of $202.2 billion; diluted earnings per share were $1.89 against expectations of $1.97. Reuters reported fourth-quarter sales guidance of $240 billion to $247 billion, with its $243.5 billion midpoint below LSEG’s $244.51 billion estimate. AMZN closed at $243.79, down 4.3%, before falling as much as 7% in extended trading.

Advertising showed a different constraint. Reuters reported revenue rose 12% to $19.6 billion, below LSEG’s 18% growth estimate and down from 26% growth the previous quarter. Jassy attributed part of the slowdown to moving Prime Day into the second quarter and forecast “high teens” advertising growth in the fourth quarter.

Buyer implications: For owners and founders of small teams, whether serving businesses or consumers, these results support procurement questions, not a pricing forecast. An AI-enabled customer-acquisition or service workflow should justify its expense through measurable value; buyers should also examine capacity limits and dependence on a single vendor. That’s an editorial inference, not evidence that service prices will rise or fall. Infrastructure expansion and customer economics remain separate tests: a supplier can build more capacity without making a buyer’s workflow worth its cost.

Sources

About the author

Greta Reinhart

ENTERPRISE SAAS

Greta Reinhart tracks the enterprise software stack from San Francisco — data platforms, AI bundling, seat pricing, and channel checks across the largest SaaS vendors. She files on go-to-market shifts, packaging changes, and quarterly enterprise reads.