Amazon Shares Fall On Q3 Earnings Miss As Big Tech Market Rout Continues

Amazon shares fell as much as 9% in after-market trading Thursday after the tech giant reported third-quarter earnings below Wall Street analysts’ expectations. Earnings per share came in at $1.89 on a diluted basis, down from $1.95 in the year-ago quarter, while total revenue climbed 12% to $201.9 billion. The consensus forecast from analysts called for earnings per share of $1.97 and $202.25 billion in revenue. In its earnings release, Amazon noted that the downturn in earnings resulted mainly from the $9.5 billion in pre-tax gains in the third quarter of 2025 related to investments in AI mega-startup Anthropic. Along with the disappointing financials, Amazon also said its fourth-quarter revenue will be between $240 billion and $247 billion, suggesting it has a chance to fall below the Street outlook of $244.5 billion. Watch on Deadline Amazon stock dropped below $230 after hours after surrendering 4% during the regular trading day. The after-hours decline improved to 6% but shares were still down ahead of a scheduled conference call with top execs at the top of the next hour. Investors have been punishing tech stocks this week as they seek indications of returns on the sector’s heavy spending on artificial intelligence. A number of major players, among then Google and parent Alphabet, Meta, Microsoft and Nvidia, are collectively pouring hundreds of billions of dollars a year into the AI buildout. Alphabet saw its shares plunge 12% on Thursday, a rare double-digit move for the large-cap issue, after the company missed revenue targets on Wednesday. Shares in Nvidia are down 6% over the past month amid mounting skepticism, and Meta stock has taken a 5% hit over the past week despite a solid quarterly earnings report last week. Amazon’s web services unit, AWS, has been shelling out significant sums on AI, but CEO Andy Jassy said in the earnings release that the spending helped lead to 39% revenue growth in the quarter and a projected annual run rate of $184 billion. Revenue will grow by more than 40% in 2027 and ’28, he predicts. “Our AWS investment in functionality and infrastructure is working,” he said. While bulls and bears will continue to argue about the ROI on AI spending, there were plenty of disconcerting signs across the full quarterly report. Advertising, which had been growing by more than 20% each quarter for the past few years, actually declined from the second quarter. It came in at $19.6 billion, a 12% uptick from the year-ago period. In its Prime Video business, which has been expanding its sports rights portfolio alongside other content investments, advertising has been a key element in the strategy since it launched across all Prime titles in 2024. High atop the Amazon earnings release was a caveat reminding investors that Prime Day, a major tentpole for e-commerce, moved earlier this year and occurred in the second quarter in most large countries. Last year and in years past, it took place entirely during the third quarter. Had that shift not happened, Amazon estimated its revenue increase would have been about 4% higher.