Amazon Q3: AWS Soars but AI Spending Weighs

Episode 1 · AWS Set to Hit $185B Annual Revenue as Shorts Turn Bearish on Amazon (2026-10-30, 2 posts)

Investor Rihard Jarc says AWS is heading for one of its best quarters ever, with annualized revenue of about $185 billion, up roughly 40% year-over-year, and is puzzled by bearish sentiment before Amazon's earnings.

• AWS ARR Set to Hit $185B Growing 40% YoY While Investors Turn Bearish on Amazon — RihardJarc · 2026-10-30
• AWS ARR to hit $185B growing 40% YoY, yet investors turn negative pre-earnings — RihardJarc · 2026-10-30

Episode 2 · Amazon Q3: AWS growth hits five-year high yet misses buy-side bar; $77B+ AI capex turns FCF negative (2026-10-30, 6 posts)

Amazon reported Q3 2025 results on October 30, painting a mixed picture of "soaring AI investment, strained financials"; markets reacted negatively, with the stock falling more than 5% after hours (closing at $231.08, down 5.21%).

Confirmed

• AWS revenue grew 39.3% year-over-year to $46 billion, accelerating from Q2's 36.8% — its fastest pace in nearly five years; annualized revenue reached $184 billion (@BethKindig, @RihardJarc)
• CEO Andy Jassy offered forward guidance: AWS revenue growth is expected to exceed 40% in both 2027 and 2028 (@BethKindig)
• Q3 spending on AI infrastructure and other capital investments topped $77 billion, well above Wall Street expectations (@Polymarket)
• Revenue and EPS both missed expectations; RBC's quick take noted AWS growth still fell short of the buy-side "baseline" of 42-43% (@Kr00ney)
• Free cash flow over the trailing 12 months was a net outflow of $42.4 billion, versus a net inflow of $14.8 billion a year earlier (@Kr00ney)
• Polymarket's "AI bubble bursts by year-end" contract is priced at only about a 10% implied probability, with over $3.14 million in volume traded (@Polymarket)

Why it matters

The report captures both sides of the cloud providers' AI arms race: on one hand, AWS posted its fastest growth in nearly five years and management guided to over 40% growth for 2027-28, showing AI demand is genuinely pulling cloud and compute consumption; on the other hand, massive capex has driven free cash flow deep into negative territory, and even 39.3% growth failed to meet elevated buy-side expectations — a sign the market is pricing returns on AI investment quite harshly. Meanwhile, prediction markets assign only about a 10% chance to an AI bubble bursting this year, suggesting mainstream speculative sentiment still bets that "the massive spending is real and the bubble won't pop for now" — the tension between reported fundamentals and market pricing is worth watching closely.

• AWS hits $184B ARR, up 39.3% year over year — RihardJarc · 2026-10-30
• Amazon misses on sales and EPS as AWS grows 39.3% but falls short of buy-side bar — Kr00ney · 2026-10-30
• AWS revenue jumps 39.3% to $46B, fastest growth in five years; Amazon projects 40%+ through 2028 — Beth_Kindig · 2026-10-30
• Amazon's AI splurge flips free cash flow to -$42.4B TTM as sales and EPS miss estimates — Kr00ney · 2026-10-30
• Amazon discloses over $77B in Q3 capex on AI infrastructure, far above Wall Street expectations — Polymarket · 2026-10-30
• Polymarket prices 10% chance of AI bubble bursting by year-end as Amazon's Q3 capex tops $77B — Polymarket · 2026-10-30