Amazon delivered mixed results for its fiscal third quarter, falling short of Wall Street expectations while showcasing strong growth in its cloud computing division. The company reported a 12% increase in net sales to $201.94 billion, but its free cash flow loss widened to $42.4 billion as it continues to invest heavily in artificial intelligence and other technologies.
Amazon Web Services (AWS), the company's cloud computing unit, saw sales rise 39.3% to $46 billion, marking the fastest growth rate in nearly five years. CEO Andy Jassy expressed optimism about AWS's future, predicting 40% annual sales growth over the next two years and projecting the unit could become a $1 trillion-plus business within five to ten years.
Despite the positive outlook for AWS, investors reacted negatively to the overall earnings report, with shares dropping 7% in after-market trading. Concerns centered on Amazon's substantial spending on AI data centers and other capital investments, which totaled $220 billion this year. Jassy acknowledged the rapid deployment of AI technology, noting that the company is installing an AI chip about every 14 seconds.
The earnings report also highlighted Amazon's efforts to speed up order delivery times through robotics and AI, which helped the company surpass Walmart as the nation's largest company by revenue earlier this year. However, the company's net income decreased slightly to $20.69 billion, or $1.89 per share, compared to $21.19 billion, or $1.95 per share, in the same period last year.