Amazon earnings watch: AWS growth, capex and margins in focus
Amazon earnings watch: AWS growth, capex and margins in focus
Amazon.com Inc (AMZN) reports Q3 after the close on Oct 29, 2026, so the print is minutes away. The stock was at $245.23 (-3.68%) as of 3:32 PM EDT. That sits near the 200-day area, and the market cap is about $2.64T.
Amazon.com Inc (AMZN): Trading at $245.23 (Market Cap: $2.64T) || Consensus EPS ~$1.96–2.01 || Consensus revenue ~$202.1B || Fwd P/E 32.2x || Fair Value upside 11.0% (as of 3:32 PM EDT)
What needs to go right
- AWS growth. The main swing factor. Coverage cites recent growth of 36.7% and a $496B backlog. AWS was about 21% of Q2 revenue but about 60% of operating income. Read more (Oct 29, 2026)
- Capex discipline. 2026 spending is guided to about $220B, up from $200B, partly on higher memory costs. Consensus has about $58.6B for Q3 and $65.2B for Q4. Trailing free cash flow was already negative by about $7.6B. Any raise above $220B is the bear trigger.
- Margin normalization. Q2’s 39.4% AWS operating margin included a one-off energy-derivatives gain that isn’t in Q3 guidance. Sequential dilution is likely, so a dip here should not surprise anyone. Guidance for Q3 operating income is $22.5B–$26.5B, against consensus of about $26.2B.
- Q4 guide. Consensus Q4 revenue is $244B and EPS about $2.46–2.50. Holiday guidance may matter as much as the Q3 numbers.
Track record check
| Quarter | EPS surprise | Price reaction |
|---|---|---|
| Q3 FY25 | +25.0% | +6.04% |
| Q4 FY25 | -0.51% | -9.73% |
| Q1 FY26 | +70.6% | +2.06% |
| Q2 FY26 | +217.7% | +19.82% |
Revenue beat in all four quarters. The one miss on EPS came with the worst reaction, so the guide and the spending plan have mattered more than the headline beat. Consensus EPS estimates have also risen 4.63% over 90 days, which raises the bar. Q2’s one-off gain inflated that quarter’s EPS surprise.
Trading scenarios
Levels come from the Oct 29 setup coverage.
| Scenario | Trigger | Possible zone |
|---|---|---|
| Bull | AWS ≥35%, capex held near $220B, FCF improving | $265–270, then the $284 record close |
| Base | In-line, cautious capex tone | Chop between $250 and $257 |
| Bear | AWS | $240–245 (200-day area) |
A strong beat plus bigger spending could still disappoint, as Q4 FY25 showed.
Technical backdrop
- Trend: The daily gauge reads Strong Sell. Price is below the 10, 20, 50 and 100-day SMAs, which cluster at about $252–255. Only the 200-day SMA ($243.39) is still acting as support.
- Momentum: RSI is 41.5 and MACD is negative. Williams %R at -84.9 is oversold. ADX at 13.4 shows no strong trend.
- Volatility: ATR is $6.70 (high volatility). Gaps through the $250–255 resistance band or below $243 are plausible.
- Resistance: The old pivot is near $254, so the first test on a beat is reclaiming the $252–255 cluster.
- Contrarian angle: Oversold readings and a stock 3.7% lower into the print leave room for a relief bounce. Weak trend structure could also cap it.
Implications
The setup is a three-variable test of AWS growth, AWS margin and capex. Fair Value is about $272 (upside 11.0% as of 3:32 PM EDT), and analyst targets run $330–380. A clean AWS beat could close that gap, while a capex raise would test $243. Consensus revisions on revenue are flat (-0.79% over 90 days), so the bar is mostly about quality, not volume.