Amazon Crashes 11% After Q3 EPS and Revenue Miss Despite AWS Beat and Strong Operating Income

Amazon shares fell 11% after the company reported Q3 earnings that missed on the headline metrics investors watch most closely. EPS came in at $1.89, below the $1.97 consensus, and net sales of $201.9 billion fell short of the $202.26 billion estimate. The miss was partly offset by a standout operating performance: operating income of $28.08 billion topped the $26.06 billion estimate by a wide margin, pushing operating margin to 13.9% against a 12.9% expectation.

AWS remained the bright spot, posting net sales of $45.98 billion, above the $45.68 billion estimate, with revenue growth of 39% year over year excluding currency effects. Amazon said AWS is now running at a $184 billion annualized revenue rate and projected growth above 40% in both 2027 and 2028. The company's AgentCore platform has attracted tens of thousands of customers, with twice as many AI agents deployed in Q3 as the prior quarter, and Alexa for Shopping now reaches more than 400 million customers with interactions up 570% year over year. Capital expenditure came in at $77.3 billion for the quarter, well above the $57.47 billion estimate, as Amazon accelerates AI infrastructure buildout. Full-year 2026 cash capex guidance remains approximately $220 billion. Q4 net sales guidance of $240 billion to $247 billion and operating income of $28.5 billion to $33.5 billion were both roughly in line with consensus.

Intel also reported after the close, delivering a Q3 adjusted EPS of $0.52, well above the $0.41 estimate, with data center and AI revenue of $7.32 billion crushing the $6.67 billion forecast by 78% year over year. However, Intel's Q4 outlook was sharply below expectations: revenue guidance of $15 billion to $16 billion compared with the $17.05 billion consensus, adjusted EPS of $0.25 against a $0.43 estimate, and adjusted gross margin of 38% versus a 42.8% expectation. CFO David Zinsner told Reuters that an explosion at Intel's Kiryat Gat fab in Israel during October cut Q4 revenue by approximately $300 million and hurt gross margins by about 200 basis points. The fab was offline for two weeks following the blast, and Intel expects a similar revenue impact in Q1 while still assessing how many affected wafers are salvageable. Intel also said it expects the PC market to decline at least through the first half of next year and potentially into H2 2027.

Among the other major reports, Rivian beat on revenue with $2.16 billion against a $1.99 billion estimate, narrowed its adjusted loss per share to $0.48 from a $0.61 estimate, and raised its full-year delivery guidance to 67,000 to 70,000 vehicles. The R2 became Rivian's best-selling model by volume with a record 19,248 deliveries. Starbucks posted Q4 adjusted EPS of $0.80, beating the $0.72 estimate, with global comparable sales up 7.2% and U.S. comps up 7.7%, though revenue of $9.14 billion missed slightly and international comps of 0.9% fell well short of the 3.2% estimate. The company said it is ahead of schedule on its FY28 financial framework. Gilead Sciences beat Q3 estimates with adjusted EPS of $2.55 versus a $2.19 forecast and product sales of $8.3 billion, driven by 18% HIV franchise growth, but its full-year EPS guidance swung to a loss of $0.85 to $1.20 due to $12.4 billion in acquired IPR&D charges. Strategy reported Q3 net income of $19.53 billion, up 600% year over year, driven by a $20.91 billion unrealized gain on its 848,517 bitcoin holdings, though core software revenue of $125.4 million missed estimates.