TLDR
- Amazon closed at $250.69 on Tuesday, up 2.06%.
- AWS revenue hit a record $45.9 billion, up 39%.
- AWS backlog reached $578 billion, and Jassy sees 40%+ growth in 2027 and 2028.
- Q3 EPS of $1.89 missed the $1.97 estimate.
- Analyst consensus is Moderate Buy with a $321.02 target.
Amazon closed at $250.69 on Tuesday, up 2.06% on the day. The stock was down 15% from its August record high as of last Friday’s close.
The pullback follows third-quarter results on Oct. 29 that were mixed on the headline numbers. Earnings per share came in at $1.89, against the $1.97 analysts expected.
Revenue was $201.94 billion, just under the $202.22 billion estimate. That still marked 12.1% growth from a year earlier.
The cloud unit told a different story. AWS revenue hit a record $45.9 billion, up 39%.
It was the sixth straight quarter of faster growth. AWS now runs at an annual pace of $184 billion.
What Andy Jassy told investors about AWS
On the earnings call, CEO Andy Jassy said AWS could grow more than 40% in both 2027 and 2028. He also pointed to a path toward $1 trillion in annual revenue within five to 10 years.
Amazon $AMZN CEO Andy Jassy expects AWS growth above 40% in both 2027 and 2028, and said:
“There has never been a trillion dollar revenue business, and we may have two of them in the next 5-10 years.” pic.twitter.com/5GufGESthG
— Wall St Engine (@wallstengine) October 29, 2026
The backlog backs up that talk. AWS ended the quarter with $578 billion in orders waiting on data center capacity.
Custom chips are a big part of the story. Commitments for Graviton and Trainium rose 20 times from a year ago, and Amazon says they offer 30% to 40% better price performance.
Amazon plans to offer Trainium beyond AWS in late 2027. Bedrock is growing fast too, with Fortune 500 spending up sevenfold and token volume up 17 times.
The service offers more than 100 models from firms like OpenAI, Anthropic, Mistral AI and Meta Platforms. Jassy called it the fastest-growing multibillion-dollar business in AWS history.
The spending and cash flow side
Amazon expects to spend about $220 billion on data center buildout in 2026, with more planned for 2027. Reports also cited a $34.8 billion free-cash-flow outflow and an $80 billion supplier financing plan.
Jassy said the investments should bring higher returns and more free cash flow than he had imagined. Those costs hit earnings over several years, since data centers have long useful lives.
Earnings carry a twist. Amazon booked over $68 billion in non-operating profit in the first three quarters, mostly paper gains on its Anthropic stake.
Analysts see 2027 earnings of $10.58 per share. The trailing price-to-earnings ratio is 19.4, and the forward ratio is 22.8.
Sterling Manor Financial opened a new Amazon position worth about $830,000 in the third quarter, per an SEC filing. Institutions own 72.20% of the stock.
Freedom Broker lifted its price target to $330, and Phillip Securities upgraded the stock to Strong Buy. Rosenblatt kept a buy rating with a $360 target, and MarketBeat’s consensus is Moderate Buy with an average target of $321.02.
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