Amazon’s third-quarter figures tell two very different stories at once: advertising revenue growth slowed sharply, while Amazon Web Services (AWS) posted its fastest expansion in nearly five years.
The company reported $201.9 billion in net sales and diluted earnings per share of $1.89. The analyst consensus had projected $202.31 billion in revenue and $1.96 in earnings per share. Amazon shares were down 4% after the market closed following the report.
For readers who follow the business machinery around games, streaming, online retail and digital entertainment, the most notable contrast is between advertising and cloud computing. Advertising had been one of Amazon’s more consistently fast-growing businesses. AWS, meanwhile, is central to the infrastructure conversation across the wider technology sector. In this quarter, the cloud division supplied the biggest growth number in the report.
Amazon advertising growth drops from the low 20s to 11%
Amazon said advertising revenue grew 11% year over year in the third quarter. That is a substantial deceleration from the prior pattern: growth had remained around 22% across the previous four quarters, then climbed to 26% in the second quarter of 2026.
The company attributed the slower rate to two factors: unfavorable foreign-exchange movements and a calendar change for Prime Day. Amazon held Prime Day during the second quarter for most larger countries, shifting a major retail event—and associated advertising activity—out of the third-quarter comparison.
Year-over-year growth compares a result with the same period one year earlier. It is useful because it can reduce the effect of regular seasonal patterns, but it does not eliminate the impact of moving a major commercial event between quarters. If Prime Day activity was more concentrated in Q2 this year than it was in the comparable period, Q3 advertising growth can look softer even if the underlying ad business remains important.
Foreign exchange is another material complication for international businesses. When currencies move against the dollar, revenue generated outside the United States can translate into fewer dollars in financial reporting. That does not automatically mean that customer demand in the affected markets declined; it means the reported dollar figure is influenced by exchange rates as well as local sales.
That distinction matters when interpreting an 11% growth rate. The reported slowdown is real, and it arrived after several quarters of materially higher percentages. But Amazon’s explanation indicates that timing and currency translation were contributors, rather than presenting the number solely as a change in advertising demand.
Related coverage includes Amazon Q3 Ad Revenue Growth Slows as AWS Surges 39%.
AWS becomes the quarter’s standout growth engine
AWS revenue increased 39% to $46 billion. Amazon described that as the division’s fastest growth in nearly five years. The rate was also nearly 20 percentage points above the 20% AWS growth reported in the third quarter of 2025.
AWS is Amazon’s cloud-computing business. In plain terms, cloud infrastructure gives organizations access to computing capacity and related technology services without needing to operate every piece of hardware themselves. Its performance is relevant beyond Amazon because cloud spending is a major part of the modern digital economy, including the services used by entertainment, software and online platforms.
Andy Jassy, Amazon’s president and CEO, said the company’s investments in AWS functionality and infrastructure were producing results. He cited the 39% year-over-year increase and described AWS as operating at a $184 billion revenue run rate.
Revenue run rate is an annualized way of expressing a current revenue pace. It is not the same as saying AWS recorded $184 billion in revenue during the quarter. Rather, it uses the current level of activity to indicate the approximate scale the business would reach over a full year if that pace continued.
Jassy also said Amazon projects AWS revenue growth rates above 40% in both 2027 and 2028. Those are forward-looking company expectations, not completed results, but they make clear how prominently AWS figures in Amazon’s growth outlook.
For the games business, cloud performance is worth watching even when the report contains no specific announcement about a game, platform or service. Large technology companies increasingly affect the conditions in which games are developed, operated and distributed: online services need computing resources, publishers and creators rely on digital tools, and players expect persistent updates and connected features. A strong cloud quarter does not establish any particular impact on a specific game, but it reinforces the strategic weight of infrastructure in the broader business environment.
That wider overlap has remained visible across major technology companies. For example, Microsoft’s games organization has recently been in focus following reports concerning longtime Forza Motorsport leader Dan Greenawalt; the reported retirement of the Turn 10 founder is a separate story, but one that illustrates how closely game studios sit within much larger corporate technology structures.
Retail revenue grows at a slower pace
Amazon’s North American revenue rose 6% to $112.9 billion. International revenue increased 5% to $43.1 billion. Both figures are meaningful gains in absolute dollars, though their percentage growth was far below the AWS result.
Jassy said that broader product selection and faster delivery were helping Amazon gain more retail market-segment share while margins improved. Margin generally refers to how much profit a business retains after the relevant costs are accounted for. Improving margins can be especially important in retail, where revenue can be enormous but fulfillment, shipping and operating expenses also matter greatly.
He also named Grocery, Pharmacy, Amazon Leo and Zoox as newer businesses making encouraging progress. The report did not provide individual financial results or additional operating details for those businesses, so their specific contribution to the quarter cannot be determined from the available figures.
What the mixed report means—and what it does not
The immediate market reaction centered on results landing below the analyst consensus and on advertising’s abrupt deceleration. On those points, the numbers are straightforward: net sales came in below the $202.31 billion estimate, earnings per share fell below the $1.96 estimate, and the ad segment’s growth dropped from 26% in the preceding quarter to 11%.
At the same time, calling the entire report weak would overlook AWS. A 39% rise to $46 billion is a major result by any ordinary reading, especially after AWS grew 20% in the year-earlier third quarter. The quarter therefore presents Amazon with a split picture: its high-profile advertising growth cooled under timing and currency pressure, while cloud computing accelerated sharply.
It is also important not to treat one quarter as a full verdict on either segment. Prime Day timing can change comparisons from one quarter to the next, and foreign exchange can affect reported international results. Conversely, a single exceptional cloud-growth figure does not guarantee that every future quarter will replicate it. The most supportable reading is narrower: Amazon entered the period with advertising growth slowing visibly, AWS accelerating dramatically, retail revenue continuing to rise, and investors reacting negatively to the gap between reported results and expectations.
Jassy framed the longer-term ambition in unusually large terms, saying Amazon could have two trillion-dollar revenue businesses over the next five to 10 years. That is an aspiration rather than a current financial result. The concrete evidence from this quarter is that AWS is rapidly gaining momentum, while Amazon’s advertising business faces a much more difficult comparison after the company changed the timing of Prime Day in many large markets.
