Equities

Amazon's cloud has its fastest growth in nearly five years, but the company still misses estimates

AWS grew 39%, but Amazon fell short on earnings and revenue. Sandisk beat and announced an 8-for-1 split, and Starbucks' U.S. comparable sales topped estimates while its revenue missed.

By Marcus Rodriguez · Oct 30, 2026, 12:50 AM EDT

Why it matters: AWS is growing at its fastest pace in nearly five years, but Amazon's surging capital spending has turned its trailing free cash flow into a $42.4 billion outflow.

For information only, not investment advice. Prices delayed.

Tickers: AMZN, SNDK, SBUX

Amazon ($AMZN) posted its fastest cloud growth in nearly five years and still missed Wall Street. Sales at Amazon Web Services rose 39% to $46.0 billion, Amazon said. But earnings of $1.89 a share and revenue of $201.94 billion both came in under the LSEG estimates of $1.96 and $202.31 billion, CNBC reported, and the shares fell in extended trading.

Underneath, the picture was mixed. Total net sales rose 12% to $201.9 billion, and operating income climbed to $28.1 billion from $17.4 billion a year earlier, for a 13.9% operating margin that Amazon called its highest ever. Net income slipped to $20.7 billion from $21.2 billion, which the company put down mainly to $9.5 billion of investment gains in the year-earlier quarter. Advertising was a soft spot: $19.64 billion against a $20.82 billion StreetAccount estimate, according to CNBC.

Then there's the spending. Amazon still expects about $220 billion of cash capital expenditures this year, and trailing 12-month free cash flow has swung to an outflow of $42.4 billion, driven by a $94.8 billion jump in purchases of property and equipment. Chief executive Andy Jassy told analysts the company expects to spend meaningfully more in 2027, CNBC reported. “Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 ($184 billion revenue run rate) and projected revenue growth rates of over 40% both in 2027 and in 2028,” Jassy said in the release. Amazon guided fourth-quarter net sales to $240.0 billion to $247.0 billion, in line with the $244.5 billion LSEG consensus, per CNBC.

Sandisk ($SNDK) delivered the cleaner beat. Fiscal first-quarter revenue rose 23% from the prior quarter to $11.0 billion, and GAAP net income came to $8.1 billion, or $52.60 a share, the company said. Revenue topped the $10.7 billion analysts expected, and EPS beat a $47.15 estimate, Yahoo Finance reported, citing S&P Global Market Intelligence. That comparison uses the GAAP figure; on Sandisk's non-GAAP measure, EPS was $49.51.

The memory maker guided second-quarter revenue to $12.2 billion to $12.6 billion, a midpoint above the $12.23 billion analysts forecast, according to Yahoo Finance, and non-GAAP EPS of $55.00 to $57.00 on a pre-split basis. It bought back $5.0 billion of stock in the quarter and announced an 8-for-1 stock split effective Nov. 19. “We have started fiscal year 2027 with another quarter of strong performance, with robust and growing demand for our products driving outpaced growth in our data center business,” Chief Executive David Goeckeler said.

Starbucks ($SBUX) handed in a split decision. Global comparable sales rose 7.2% in its fiscal fourth quarter and U.S. comparable sales rose 7.7%, the company said, both ahead of StreetAccount estimates of 6% and 6.5%, according to CNBC. Adjusted EPS of 80 cents beat the 72 cents expected. International comparable sales, though, rose just 0.9%, short of a 3.2% estimate, and revenue fell 4% to $9.14 billion, missing the $9.23 billion LSEG forecast. Starbucks tied the revenue drop mainly to converting its China retail operations to a licensed joint venture.

For fiscal 2027, Starbucks guided adjusted EPS to $3.15 to $3.25, above the $3.14 expected, but sees revenue declining about 1%, where analysts had forecast 1.4% growth, CNBC reported. “We had a terrific quarter and a great year driven by our focus on the fundamentals and what has always set Starbucks apart: exceptional coffee, a moment of connection and a world-class customer experience. This gives me confidence our performance is durable,” Chairman and Chief Executive Brian Niccol said in the release.

Tags: earnings · guidance · big-tech · ai · semiconductors · retail-consumer