Amazon Q3 2026 Earnings: Best Operating Margin Ever, So Why Did the Stock Drop?

Amazon's third quarter of 2026 brought its highest operating margin ever, 13.9%, operating income of $28.1 billion above the top of its own forecast, and AWS growth of 39%, its fastest in nearly five years, Amazon says. Yet the shares fell about 6% in after-hours trading on October 29. CNBC tied the drop to results below Wall Street's expectations: earnings per share of $1.89 against the $1.96 analysts expected (LSEG), with revenue and ad sales also below forecasts. And free cash flow over the last twelve months was minus $42.4 billion, as spending rose mainly for AI, Amazon says.

Results are for the quarter ended September 30, 2026, as reported by Amazon on October 29, 2026. Operating margin is operating income as a share of net sales. Amazon's forecast is its July 30, 2026 guidance (operating income $22.5 to $26.5 billion). Analyst estimates are LSEG's, as reported by CNBC. Free cash flow is for the trailing twelve months, as defined by Amazon. Net sales growth would have been about 4 points higher without Prime Day moving into the second quarter, Amazon says. The share move is the after-hours price at 5:15 pm ET on October 29 vs the 4:00 pm close (Nasdaq), as of October 29, 2026.