Amazon shares are nearly 8% lower ahead of the bell, and the tech-heavy Nasdaq is in sell-off mode.
The online retailer earned $1.89 a share against forecasts of $1.96 to $1.97, on revenue of $201.9 billion against the $202.2 billion expected.
Capital expenditure came in at $77.3 billion against a consensus of $58.67 billion, and free cash flow over the past 12 months was an outflow of $42.4 billion.
It is the third big technology group in nine days to be sold on the cost of its AI build-out.
Alphabet, the Google parent, fell 12% on Thursday after earnings per share of $2.12 missed the $2.99 forecast.
Meta fell 7.23% on 22 October after quarterly capex exceeded its operating cash flow.
The message from the market is that strong revenue no longer buys forgiveness for spending that outruns cash generation.
There was good news at Amazon, where Amazon Web Services, its cloud arm, grew 39% to $46 billion, its fastest rate in almost five years.
Chief executive Andy Jassy expects AWS growth above 40% in 2027 and 2028.
Fourth-quarter revenue guidance of $240 billion to $247 billion is in line with the $244 billion consensus, but operating income guidance of $28.5 billion to $33.5 billion has a midpoint below the $33.2 billion expected.
Broker Yorkville Ives kept its "outperform" rating and $300 price target, about 18% above the share price.
Analyst Dan Ives said higher 2027 spending would confirm demand rather than act as a warning, given an AWS backlog near half a trillion dollars.
I've left out the Microsoft comparison and Meta's capex detail to hold the length. I can add either back.
