Is Amazon stock a buy after Q3 2026 earnings?

HOLD: Amazon is worth $245.74, 2% below the $250.69 price, with AWS at 40.0% in 2027 and 2028.

Amazon · Q3 2026 · Published Nov 5, 2026 · Data cut-off: 2026-11-04 · By DeepCell AI · Sources

1 · Cover

HOLD: Amazon is worth $245.74, 2% below the $250.69 price, with AWS at 40% in 2027 and 2028

AWS and margins beat, but the capex bill is still ahead. We would buy at $214 or below and sell at $328 or above.

HOLD
Base value per share$245.74up from $225.05 before results
Price, 3 November close$250.69$248.00 before results
Value if AWS stays strong$266short of the $288 a BUY needs
Median analyst target$329.50set before results, above every forward case
AWS earned the higher value.

It grew 39% against our 36%, at a 38.7% margin, and operating income of $28,076M topped the guide.

The price already pays for it.

Management's 40% AWS outlook only brings the value to about the price. At 24.5x FY2027E earnings there is no margin of safety.

Capex is why this is not a BUY.

Trailing free cash flow is an outflow of $42,357M, and more spending is planned for 2027. If capacity outruns demand the value is $151.

Source: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026) · stockanalysis.com, AMZN price history (close 3 November 2026) · stockanalysis.com, AMZN analyst forecast

2 / 10

2 · Our view

Q3 operating income of $28,076M beat the guide; GAAP EPS of $1.89 fell short of consensus

Sales landed near the top of the guide. On our basis, which strips other expense and re-taxes, EPS was $2.04.

Exhibit 1: Net sales by quarter

USD billions; the lighter bar is our forecast

Net sales · Q3 2025A: $180BNet sales · Q4 2025A: $213BNet sales · Q1 2026A: $182BNet sales · Q2 2026A: $201BNet sales · Q3 2026: $202BNet sales · Q4 2026E: $247BQ3 2025AQ4 2025AQ1 2026AQ2 2026AQ3 2026Q4 2026E$0B$50B$100B$150B$200B$250B$180B$201B$202B$247BOur forecast

Exhibit 2: Q3 2026: reported against expectations

The guide midpoint, consensus, our forecast before results, and the reported figure

USD millions except EPS and growth
Q3 2026 · Amazon guidanceQ3 2026 · Street consensusQ3 2026 · Our forecastQ3 2026 · Actual
Net sales$M199,500202,210201,985201,944
Operating income$M24,50026,03128,076
GAAP diluted EPS$1.961.931.89
EPS excluding marks$1.932.04
AWS sales growth%36.0%39.3%

Margin did the work. Operating margin was 13.9%, the highest Amazon has reported, against 12.9% in our forecast.

Source: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026) · MarketBeat, AMZN consensus EPS · Benzinga via Longbridge, 22 Oct 2026

3 / 10

3 · Q3 results

AWS grew 39.3%, ahead of our 36.0%, and earned 63.3% of operating income

Management says AWS can grow more than 40% in 2027 and 2028, and our base now carries 40% in both years.

Exhibit 3: AWS growth by quarter

Year on year: excluding FX through Q2 2026, then as reported; the line is our forecast before results

AWS growth, year on year · Q1 2025A: 17%AWS growth, year on year · Q2 2025A: 17%AWS growth, year on year · Q3 2025A: 20%AWS growth, year on year · Q4 2025A: 24%AWS growth, year on year · Q1 2026A: 28%AWS growth, year on year · Q2 2026A: 37%AWS growth, year on year · Q3 2026: 39%Q1 2025AQ2 2025AQ3 2025AQ4 2025AQ1 2026AQ2 2026AQ3 20260%10%20%30%45%17%37%39%Our Q3 forecast before results: 36%
Q3 AWS margin38.7%our forecast 37.0%
AWS backlog$578Bup from $496B at Q2, per the call

We raised the forecast to management's view. That moved the value from $227.00 to $245.74; later years are unchanged, as management gave no figure past 2028.

Source: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026) · The Singju Post, Amazon Q3 2026 call (third-party transcript) · Constellation Research, 29 Oct 2026

4 / 10

4 · AWS

Retail margin beat, while International and advertising fell short of our forecast

Prime Day moved into Q2, which took about four points off Q3 sales growth. Retail moves the quarter more than the value.

Exhibit 4: North America sales growth by quarter

Year on year, reported; the lighter bar is our forecast, the arrow the step from Q2

North America sales growth (year on year, reported) · Q1 2026A: 12.1%North America sales growth (year on year, reported) · Q2 2026A: 16.1%North America sales growth (year on year, reported) · Q3 2026: 6.2%North America sales growth (year on year, reported) · Q4 2026E: 10.0%0%5%10%15%20%Q1 2026AQ2 2026AQ3 2026Q4 2026E12.1%16.1%6.2%10.0%Our forecastPrime Day moved out: -9.9%
North America margin, Q37.7%our forecast 7.0%
Advertising sales, Q3$19,637Mup 11%, against our 24%

Two lines missed our forecast. International grew 5% against our 10%. Amazon put the advertising slowdown down to timing and expects growth in the high teens in Q4.

Source: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026)

5 / 10

5 · Retail and advertising

A $220B capex year took trailing free cash flow to a $42,357M outflow

Free cash flow recovers only as capex falls as a share of sales, and management expects to spend meaningfully more in 2027.

Exhibit 5: Operating cash flow, cash capex and free cash flow (FY2021A–FY2031E)

USD billions, FY2021A to FY2031E; capex below the axis, free cash flow the line between; FY2026E is our model and runs above the reported trailing figure

Net cash from operating activities · FY2021A: $46BNet cash from operating activities · FY2022A: $47BNet cash from operating activities · FY2023A: $85BNet cash from operating activities · FY2024A: $116BNet cash from operating activities · FY2025A: $140BNet cash from operating activities · FY2026E: $229BNet cash from operating activities · FY2027E: $277BNet cash from operating activities · FY2028E: $349BNet cash from operating activities · FY2029E: $395BNet cash from operating activities · FY2030E: $438BNet cash from operating activities · FY2031E: $480BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2021A: -$55BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2022A: -$58BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2023A: -$48BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2024A: -$78BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2025A: -$128BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2026E: -$220BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2027E: -$242BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2028E: -$249BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2029E: -$241BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2030E: -$237BCash capex: purchases of property and equipment, net of proceeds and incentives · FY2031E: -$227BFree cash flow after capex (Amazon's definition) · FY2022A: -$12BFree cash flow after capex (Amazon's definition) · FY2023A: $37BFree cash flow after capex (Amazon's definition) · FY2024A: $38BFree cash flow after capex (Amazon's definition) · FY2025A: $11BFree cash flow after capex (Amazon's definition) · FY2026E: $9BFree cash flow after capex (Amazon's definition) · FY2027E: $35BFree cash flow after capex (Amazon's definition) · FY2028E: $99BFree cash flow after capex (Amazon's definition) · FY2029E: $154BFree cash flow after capex (Amazon's definition) · FY2030E: $201BFree cash flow after capex (Amazon's definition) · FY2031E: $253B-$300B$0B$250B$500BFY2021AFY2022AFY2023AFY2024AFY2025AFY2026EFY2027EFY2028EFY2029EFY2030EFY2031E$229B-$220B$9BForecastNet cash from operating activitiesCash capex: purchases of property and equipment, net of proceeds and incentivesFree cash flow after capex (Amazon's definition)Free cash flow after capex (Amazon's definition) · FY2021A: -$9BFree cash flow after capex (Amazon's definition) · FY2022A: -$12BFree cash flow after capex (Amazon's definition) · FY2023A: $37BFree cash flow after capex (Amazon's definition) · FY2024A: $38BFree cash flow after capex (Amazon's definition) · FY2025A: $11BFree cash flow after capex (Amazon's definition) · FY2026E: $9BFree cash flow after capex (Amazon's definition) · FY2027E: $35BFree cash flow after capex (Amazon's definition) · FY2028E: $99BFree cash flow after capex (Amazon's definition) · FY2029E: $154BFree cash flow after capex (Amazon's definition) · FY2030E: $201BFree cash flow after capex (Amazon's definition) · FY2031E: $253B

$172,188M of the $220B guide went out in nine months. We carry $242,048M in FY2027E, with free cash flow of $35,225M, recovering to $99,112M in FY2028E.

Source: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026) · The Singju Post, Amazon Q3 2026 call (third-party transcript)

6 / 10

6 · Capex and cash

Q3 GAAP EPS of $1.89 carried no Anthropic gain of note; on our basis it was $2.04

We keep EPS excluding marks so the quarters compare. The marks enter value through the bridge, after a haircut.

Exhibit 6: Q3 2026 GAAP EPS to EPS excluding marks

USD per diluted share; the step is other expense added back and the re-tax at the model rate

Q3 2026 EPS · GAAP diluted EPS: $1.89Q3 2026 EPS · Other expense and the re-tax: $0.15Q3 2026 EPS · EPS excluding marks: $2.04GAAP diluted EPSOther expense and the re-taxEPS excluding marks$1.89$0.15$2.04
Other expense in Q3$703Mafter other income of $53,415M in Q2, chiefly Anthropic
Investments per share in the value$13.69on $229,700M at 30 June; $298,800M at 30 September is not yet in

The Q3 beat was operating. The gap to GAAP EPS of $1.89 is other expense and tax, not a gain taken out.

Source: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026) · Amazon Form 10-Q for Q3 2026

7 / 10

7 · Earnings quality

The base value of $245.74 is below the price; only the strong AWS case reaches it

Faster or slower AWS growth both leave this a HOLD. Only capacity that outruns demand is a SELL.

Exhibit 7: Value per share by case

USD per share; base on WACC 10.7% and terminal growth 3.0%; the tick is the base value, the lines the price and the rating lines

Low · AWS cases: fades early to stays strong: $202Base value · AWS cases: fades early to stays strong: $246Low · All forward cases: AI overbuild to AWS strong: $151Base value · All forward cases: AI overbuild to AWS strong: $246Low · DCF method: Gordon growth to exit multiple: $246Base value · DCF method: Gordon growth to exit multiple: $246AWS cases: fades early tostays strongAll forward cases: AIoverbuild to AWS strongDCF method: Gordon growth toexit multiple$100$200$300$400$202–$266$151–$266$246–$417SELL at or below: $188Price: $251BUY at or above: $288
AWS stays strong$266a slower fade after 2028, short of a BUY
AWS fades early$20224% growth, above the $188 SELL line
AI capacity overbuilt$151below the SELL line

Fully priced, with no margin of safety. The $417 exit multiple value implies 7.4% growth forever: an upper bound, not a target.

Sources: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026) · price, stockanalysis.com, AMZN price history (close 3 November 2026)

8 / 10

8 · Valuation

What would change the rating from here

Price, or capacity that outruns demand, moves the rating. A normal range of AWS outcomes does not.

If we seeValue per shareRating
Shares at $214 or belowThe base, 15% above the priceBUY
Shares at $328 or aboveThe base, 25% below the priceSELL
AWS fades more slowly after 2028$266HOLD. BUY needs $288 at this price
AWS falls short of 40%, to the 30% and 25% we had before the call$227.00HOLD
AWS fades early, to 24% in FY2027E$202HOLD. SELL starts at $188
2027 capex well above our $242,048M, with AWS on planNear the baseHOLD. Capex without the growth is the case that matters
AI capacity outruns demand$151SELL

HOLD. The next test is Q4: a guide of $240B to $247B of sales, and the first figure for 2027 capex.

Source: Amazon Q4 2026 guidance, Form 8-K Exhibit 99.1 (29 Oct 2026) · The Singju Post, Amazon Q3 2026 call (third-party transcript) · values from the forward cases and the rating rule

9 / 10

9 · What would change the rating

What we said and what happened: HOLD stood, and we were too low on AWS and margin

Before results we set AWS lines at 34% and 40%. AWS grew 39%, between them, so the rating did not move. After the call we raised AWS to 40%.

We said HOLD before results.

The base value sat below the $248.00 price, inside the HOLD range.

Value before results$225.05on AWS growth of 36%
Our forecast missed in both directions.

Operating income beat our $26,031M. International, advertising and GAAP EPS of $1.89 against our $1.93 fell short.

Value now$245.74with AWS at 40% in 2027 and 2028
The next test is Q4.

Amazon guided sales of $240B to $247B and operating income of $28.5B to $33.5B. We carry $246,527M and $31,275M.

Source: Amazon Q3 2026 results, Form 8-K Exhibit 99.1 (29 Oct 2026) · Amazon Q4 2026 guidance, Form 8-K Exhibit 99.1 (29 Oct 2026)

10 / 10

10 · What we said and what happened

Sources

Not investment advice. Any rating here is this model's view of value against price at the data cut-off.

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