Amazon reported third quarter 2026 earnings on October 29, with net sales of $201.9 billion, up 12 percent from a year earlier, and operating income of $28.1 billion, nearly double the $17.4 billion it posted in the same quarter of 2025. The standout line was Amazon Web Services, which grew 39 percent to $46.0 billion, its fastest pace in nearly five years.

What Amazon reported

Net sales rose 12 percent to $201.9 billion, from $180.2 billion a year earlier. Excluding the effect of foreign exchange, the company said growth was 13 percent. All the figures below come from Amazon's Form 8-K, filed with the Securities and Exchange Commission on October 29, 2026.

Operating income, which strips out items like interest and investment gains and losses, climbed to $28.1 billion from $17.4 billion, lifting the operating margin to about 13.9 percent from roughly 9.7 percent a year earlier. Net income, which includes those below-the-line items, slipped to $20.7 billion from $21.2 billion, or to $1.89 a diluted share from $1.95. In other words, Amazon's core operations earned far more, while the headline bottom line edged lower because of swings in items that sit outside the operating business, such as the mark-to-market value of its equity stakes. It is a useful reminder that for a company like Amazon the operating line often tells you more about the business than net income does.

AWS did the heavy lifting

The cloud division remains the engine of Amazon's profit. AWS sales rose 39 percent year over year to $46.0 billion, a rate the company described as its fastest in nearly five years, and the business is now on a $184 billion annualized revenue run rate. AWS operating income jumped to $17.8 billion from $11.4 billion a year earlier. Put those two cloud figures against the company totals and the picture is stark: AWS produced about 63 percent of Amazon's entire operating profit from less than a quarter of its revenue, at an operating margin near 39 percent. The retail business moves the top line; the cloud business makes most of the money.

That reacceleration matters because AWS growth had cooled into the low twenties in percentage terms during 2024 and early 2025 as customers trimmed cloud spending. The renewed pace reflects demand for computing power to train and run artificial intelligence models, the same force that lifted cloud results across the week's big technology reports. It also helps explain why Amazon is spending so heavily on data centers and chips: the capital it pours into capacity today is what lets AWS book revenue tomorrow.

> "Our AWS investment in functionality and infrastructure is working," Andy Jassy, Amazon's president and chief executive, said in the release.

North America and international

Amazon's North America segment posted sales of $112.9 billion, up 6 percent, with operating income rising to $8.7 billion from $4.8 billion, close to an 8 percent segment margin. The international segment reported sales of $43.1 billion, up 5 percent, and operating income of $1.6 billion, up from $1.2 billion. Both retail segments improved their profitability, a sign that the cost discipline from Amazon's multiyear efficiency push, which included flattening management layers and tightening its logistics network, is still feeding through even as cloud carries the profit mix.

The retail story is slower growth but steadier margins. After the pandemic over-expansion, Amazon spent two years making its fulfillment network cheaper to run, and the payoff shows up in segment operating income that is rising much faster than sales. For most of its history Amazon chose to reinvest rather than report profit; the current pattern, rising margins on modest volume growth, is a different phase of the business.

The holiday quarter guidance

For the fourth quarter, which captures the holiday shopping season, Amazon guided to net sales of $240.0 billion to $247.0 billion, implying growth of 12 percent to 16 percent over the same period in 2025. It guided to operating income of $28.5 billion to $33.5 billion, up from $25.0 billion a year earlier. The wide guidance range is normal for a holiday quarter, when the timing of shopping and the cost of running the network at peak are hard to pin down in advance. A company's guidance is its own expectation, not a forecast from this desk, and actual results can land outside the range.

To read any earnings report with a clear eye, it helps to know which lines matter and which are noise. Our guide on how to read a company earnings report walks through revenue, margins, EPS and guidance, and our write-up of Meta's Q3 2026 earnings covers another of the week's big technology prints.

What to watch next

The questions for the next few quarters are whether AWS can hold a growth rate near 40 percent, how much Amazon spends to build out AI data centers, and whether consumers keep spending through the holidays. Amazon has signaled heavy capital spending to expand capacity, which supports future cloud revenue but weighs on free cash flow in the near term. Watch the gap between the capital going into infrastructure and the revenue it produces, because that spread is what the market will ultimately judge. A second thing to track is the durability of the retail margin gains: if segment operating income keeps rising faster than sales, the efficiency drive is real; if it stalls, this quarter's improvement was a one-off.

There is also the matter of how much of AWS growth is genuine new demand versus customers pre-committing to capacity for AI projects that may or may not scale. Reaccelerating cloud growth is good news, but the quality of that growth, repeat usage rather than one-time build-outs, is what separates a durable trend from a spike.

None of this is a recommendation to buy, sell or hold Amazon shares. It is a reading of what the company filed and what the numbers show.