Amazon Q3 earnings preview – AWS sold out, but how much more will it spend?
With AWS capacity largely sold out through 2027, Amazon’s Q3 results could hinge less on demand than on how much more it plans to spend.
Amazon will report third-quarter results on 29 October, with analysts expecting revenue of around $202.3bn, a 12.3% increase from $180.2bn a year earlier, and earnings per share of $1.96. Revenue estimates range from $199.4bn to $209.6bn and EPS forecasts from $1.72 to $2.32, while consensus EBITDA stands at $53.6bn.
Revision momentum has been positive, with 11 analysts raising EPS forecasts over the past 30 days against three cuts. The LSEG estimate for full-year 2026 EPS is $13.00, above the consensus mean, implying a positive surprise of 1.36%.
Amazon Web Services remains the main focus, with segment revenue expected at $45.6bn. Third-party seller services are forecast at $45.1bn, advertising at $20.9bn and subscription services at $13.9bn. Chief executive Andy Jassy told Andreessen Horowitz on 23 October that AWS capacity was sold out for 2026 and largely sold out for 2027, with a substantial portion of 2028 also committed. He added that further investment “wouldn’t be a bad use of capital”. Investors will look for any update to the company’s capital expenditure guidance of about $220bn for 2026, as well as AWS margins and demand for AI inference through its Bedrock platform.
Other areas of interest include Amazon’s $8bn cumulative investment in Anthropic, which filed for an initial public offering on 26 October at an expected valuation of around $1.5tn, and commentary on advertising, including Prime Video. Logistics costs may also feature after UPS said it had cut millions of lower-margin Amazon deliveries.
Amazon share price – technical analysis
The steady post-2022 rally in Amazon’s shares is still intact, with a fresh record high less than three months ago. Recent weakness has found support around $245, with a recovery above $250 providing a further positive boost. Initial gains target the $280 highs from August.
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