Amazon reported on October 29 its best AWS growth in almost five years (+39%), with a contracted backlog of $578 billion. The market looked at a different line: infrastructure spending jumped to $77.3 billion in a single quarter and the shares fell about 7% before the open.
The AWS Numbers: Faster Growth and Rising Margins
According to the third-quarter 2026 results, AWS brought in about $46.0 billion, up 39% from a year earlier and above the $45.3 billion analysts' consensus expected. It is the sixth consecutive quarter of acceleration and the fastest pace in almost five years. AWS operating income was $17.8 billion (+55% year over year), roughly 63% of Amazon's total operating income.
The Backlog: From $496 Billion to $578 Billion in One Quarter
Backlog is the value of contracts already signed that haven't yet turned into revenue. It went from about $496 billion at the end of the prior quarter to $578 billion, and according to the two reports we reviewed it more than doubled versus last year. Amazon projects AWS will grow more than 40% in both 2027 and 2028, though that is the company's expectation, not a result.
For context with what we've already covered on this blog: Alphabet reported a $561 billion backlog in its third quarter and Microsoft a $677 billion RPO in its first fiscal quarter. The three metrics aren't identical (each company defines its contracted pipeline its own way), so they're useful for gauging scale, not for ranking down to the decimal.
The Uncomfortable Side: Capex and Free Cash Flow
Property and equipment purchases were $77.3 billion in the quarter, more than double a year earlier and above the roughly $58.7 billion expected, according to one of the reports. Another source cites $75.9 billion of cash capex for the same quarter: these are two different measures (accrual versus cash), not a contradiction. The 2026 guidance holds at about $220 billion, and management warned that 2027 spending will be "meaningfully more."
The result: over the last twelve months operating cash flow was $168.3 billion, but property and equipment purchases totaled $215.2 billion, leaving free cash flow at −$42.4 billion (versus +$14.8 billion a year earlier). One of the reports also notes that the shares fell about 7% before the open on October 30.
What It Means for a Company Buying AI
The data in this article comes from the results reported on October 29 and from coverage summarizing them; the consensus figures and the stock reaction each come from a single report and should be checked against Amazon's official presentation.