Amazon Web Services reported third-quarter revenue of $45.98 billion, up 39% from a year earlier, accelerating from roughly 37% growth in the preceding quarter and marking its quickest expansion in nearly five years. The result gives Amazon a powerful new signal of demand for cloud computing and artificial-intelligence infrastructure just as the company is committing unprecedented sums to build more capacity.
The cloud division’s revenue exceeded the $45.29 billion analyst consensus compiled by StreetAccount, according to CNBC’s earnings coverage. Amazon’s overall third-quarter sales reached $201.9 billion, up 12%, while operating income climbed to $28.1 billion from $17.4 billion a year earlier. The results put AWS’s growth and profitability at the center of Amazon’s ability to finance an increasingly capital-intensive race for computing power.
AWS supplied most of Amazon’s operating profit
AWS generated about $17.8 billion in operating income during the quarter, compared with about $11.4 billion a year earlier. On a simple comparison, the unit accounted for roughly 63% of Amazon’s $28.1 billion in consolidated operating income. That calculation is not a measure of cash flow or a formal allocation of corporate costs, but it illustrates why cloud performance carries disproportionate weight for Amazon even though retail and advertising produce much larger revenue totals.
The 39% increase also represents a meaningful sequential acceleration. AWS revenue grew about 37% in the prior quarter, CNBC reported. Chief Executive Andy Jassy said on the earnings call that the company’s core compute and storage businesses were growing at their fastest rates in several years, tying the stronger demand to the underlying services customers use to run applications and train or operate AI systems.
The available comparisons with rivals require some care. Alphabet said Google Cloud revenue more than doubled during its third quarter, while Microsoft recently began disclosing Azure revenue in dollar terms. Those disclosures indicate robust demand across large cloud platforms, but their reporting periods, revenue definitions and product mixes are not identical. They do not establish a like-for-like industry ranking or prove that every major provider is accelerating at the same rate.
Infrastructure investment is becoming the financial trade-off
Amazon expects approximately $220 billion of capital projects in 2026, a figure that reflects its expansion of data centers, networking equipment and other infrastructure needed to support AWS and AI workloads. GeekWire’s report on the earnings call said Jassy expects 2027 capital spending to be meaningfully higher still.
That investment is already visible in Amazon’s cash metrics. Trailing-12-month free cash flow was a $42.4 billion outflow, versus positive free cash flow of $14.8 billion a year earlier. The figure is not quarterly free cash flow, and it should not be read as an operating loss: Amazon’s reported operating income rose sharply. It does show, however, how quickly infrastructure purchases and construction can consume cash even as AWS produces expanding accounting profit.
The strategic logic is that capacity itself has become a constraint and a competitive asset. Cloud customers pursuing generative-AI projects need access not only to software models but also to processors, storage, networking and physical data-center space. Amazon is building to meet that demand while also developing its own Trainium AI chips. Jassy said Amazon plans to offer Trainium outside AWS beginning in late 2027, citing customer interest, according to CNBC.
Amazon also disclosed an AWS contracted-revenue backlog of $578 billion, more than twice the level a year earlier, as reported by GeekWire. Backlog is not recognized revenue and the timing of conversion can vary with contract terms, customer deployments and cancellations. Still, the scale provides a longer-dated indicator of demand than one quarter’s revenue figure, particularly as customers reserve capacity for major AI and cloud commitments.
Guidance sets up a bigger test of the buildout
For the fourth quarter, Amazon forecast net sales of $240 billion to $247 billion and operating income of $28.5 billion to $33.5 billion. Those figures were also reported by Cord Cutters News in its summary of the company’s results. The outlook suggests management expects earnings to remain resilient even while infrastructure spending continues to rise.
Jassy went further in comments on AWS’s longer-term prospects, saying he believes the business can grow more than 40% in 2027 and 2028 and eventually reach $1 trillion in annual revenue within five to 10 years. Those are management projections, rather than reported results, and depend on Amazon securing enough power, data-center capacity and chips while persuading enterprises to keep moving workloads to its platform.
For now, the third-quarter numbers provide the clearest evidence that Amazon’s buildout is meeting active demand. AWS added roughly $12.9 billion in year-over-year quarterly revenue, based on the reported $45.98 billion total and 39% growth rate. Whether that demand can sustain returns on a capital plan approaching a quarter-trillion dollars will be the more consequential measure in the quarters ahead.
