Amazon shares sink as spending on AI overshadows growth in cloud unit
Source: Fortune ·
E-commerce giant is among the biggest spenders on AI infrastructure.
From the source
Amazon’s cloud computing unit is growing steadily, keeping pace with AI demand, but the e-commerce giant’s massive spending on AI data centers and weaker advertising performance are worrying investors. Amazon on Thursday reported third-quarter revenue of $201.9 billion, slightly missing expectations. Its profit was $20.7 billion, which also fell short of expectations and was down from the same period a year ago. Amazon said the decline was due to gains it recorded a year earlier from its investment in AI company Anthropic. Amazon Web Services, the cloud unit, saw third-quarter sales rise 39.3% to $45.98 billion, topping Wall Street targets. The results showed that demand for Amazon’s cloud services, particularly those tied to AI, remains high. But the Seattle-based company is also continuing to spend at unprecedented rates to keep up, and performance of non-cloud businesses are weakening. On Thursday, Amazon reiterated that it expects its 2026 capital expenditures to be about $220…