Andy Jassy-headed Amazon has reported a substantial cash burn in the third quarter, with heavy investment in artificial intelligence (AI) infrastructure overshadowing the tech and retail giant’s faster growth at its cloud computing business.
Amazon also signalled that it plans to raise its capital expenditure in 2027, which has added to investor concerns about the returns on its spending.
The Seattle-based retailer and tech player reported a cash burn of USD 42.4 billion on a trailing 12-month basis in the September quarter, driven by capital expenditure of USD 77.26 billion.
The spending figure was around USD 20 billion above analysts’ estimates, according to data compiled by LSEG.
The contrast with previous periods was stark.
Amazon reported a cash burn of USD 7.6 billion in the second quarter, while it generated USD 14.8 billion in cash in the third quarter of 2025.
Amazon has forecast capital expenditure of USD 220 billion this year as it invests heavily in AI software, data centres and infrastructure.
Jassy told analysts that spending next year would be “meaningfully more” than in 2026, without providing a specific figure.
The outlook adds to the scale of investment planned by major technology companies seeking to capture demand for AI services.
Amazon and Google parent Alphabet have maintained their spending expectations, while Microsoft recently lowered its capital expenditure forecast to USD 170 billion from USD 175 billion.
Jassy sought to reassure investors that the company’s investment strategy was delivering results.
“Our strategy is working, and I expect it will for the foreseeable future,” the Amazon CEO said.
He also argued that Amazon Web Services (AWS) had considerable room to expand, suggesting the cloud computing division could reach USD 1 trillion in revenue within five years.
While Amzon’s investments in AWS infrastructure and functionality were ensuring rich returns, the company’s free cash flow and fourth-quarter outlook remained concerns for investors.
Amazon’s cloud computing business continued to show robust growth, providing a positive highlight in an otherwise mixed quarterly report.
AWS revenue increased 39% to USD 46 billion in the third quarter ended September.
The performance exceeded analysts’ expectations of USD 45.61 billion and marked an acceleration from the division’s 37% growth in the second quarter.
The latest increase also represented AWS’s fastest growth in nearly five years, underlining the importance of cloud computing as companies expand their AI capabilities.
Advertising revenue, however, disappointed.
Sales rose 12% year-on-year to USD 19.6 billion, falling short of the 18% growth that analysts had expected. It was the first time in seven quarters that Amazon’s advertising business missed estimates.
The slowdown was significant compared with growth of 26% in the second quarter and 22% in the third quarter of 2025.
Jassy said he was pleased with the advertising performance, attributing some of the slowdown to Amazon’s decision to move its Prime Day discount event into the second quarter.
He forecast that advertising sales growth would return to the “high teens” in the current quarter.
He also dismissed concerns that AI shopping agents, which can automate purchases on behalf of consumers, were hurting advertising revenue.
During the quarter, Amazon blocked Meta’s Muse agent from accessing its website to shop for customers.