Amazon drops 7.4% before the opening bell; $77 billion in capital expenditures raise concerns among investors
Ai Focus
Amazon's stock price fell 7.42% to $225.71 before trading on Friday, following the company's third-quarter earnings falling short of expectations. Although revenue increased by 12% year-over-year to $201.9 billion, it was still below market expectations, and profits also fell short of estimates. The company invested over $77 billion in property and equipment during the quarter, which was higher than expected, and maintained its capital expenditure plan of $220 billion for 2026, recording negative free cash flow for the second consecutive quarter.
Amazon's stock price fell 7.42% before trading on Friday, to $225.71, a decrease of $18.08 from Thursday's closing price of $243.79. Previously, the company's third-quarter earnings did not meet market expectations.
Revenues increased by 12% year-on-year to $20.19 billion, but still fell short of expectations; profits also were lower than market estimates.
What is of even greater concern to the market is the level of spending. As Amazon expands the capacity of its data centers for artificial intelligence, the company invested over $77 billion in property and equipment during that quarter, significantly exceeding expectations.
Amazon maintains its $220 billion capital expenditure plan for 2026 and reports negative free cash flow for the second consecutive quarter.
Online store sales only grew by 2%, reaching $68.5 billion, marking the weakest growth rate since the beginning of 2023.
AWS is the highlight, with its growth accelerating for the sixth consecutive quarter.
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