Amazon Misses Q3 Estimates as AWS Growth Reaches 39%

Amazon reported third-quarter sales of $201.9 billion and earnings of $1.89 per share, missing analyst expectations, while its cloud unit posted nearly 39% growth. The company’s outlook for the holiday quarter and its plans for heavy investment in artificial intelligence weighed on the reception, with shares falling more than 5% in after-hours trading Thursday. Net sales rose 12% from a year earlier but came in below the $202.26 billion analysts expected, according to estimates cited in reporting. Earnings per share were also below the $1.96 forecast. Amazon reported net income of $20.7 billion, down from a year earlier, partly because the prior-year comparison included gains from its investment in AI company Anthropic. Amazon Web Services generated $45.98 billion in sales, up 39.3% year over year and above analyst expectations. The result reflected continued demand for cloud computing and AI-related services. The company’s advertising business grew 12% to $19.64 billion; Amazon said Prime Day timing affected the comparison, while the result also fell short of analyst forecasts. For the fourth quarter, Amazon forecast sales of $240 billion to $247 billion and operating income...