Amazon shares fall over 6% despite record margin
The move
Amazon, where Jeff Bezos remains the largest individual shareholder, reported Q3 net sales of $201.9 billion on Oct. 29, up 12% from a year earlier but just under the $202.2 billion analysts expected, with earnings of $1.89 a share versus the $1.97 forecast, per FactSet. AWS sales rose 39% to $46.0 billion, and operating income reached $28.1 billion, a record 13.9% operating margin companywide. Net income fell to $20.7 billion from $21.2 billion, largely because the year-earlier quarter included a $9.5 billion gain on Amazon's Anthropic investment. Shares fell more than 6% in after-hours trading, and Amazon's fourth-quarter sales guidance of $240 billion to $247 billion also came in below the roughly $244.2 billion analysts expected.
Why it matters
AWS posting its fastest growth in years shows cloud demand for AI is still strong, but the stock drop shows investors are getting pickier about even a small miss.
The bear case
The miss was by cents on earnings per share and a fraction of a percent on sales out of $202 billion -- a rounding error next to AWS's acceleration.
What to watch
Whether AWS growth holds above 39% as new data centers come online.