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For the third quarter of 2026, Amazon expects net sales between $197 billion and $202 billion, indicating growth of 9% to 12% compared with the third quarter of 2025.
The Zacks Consensus Estimate for net sales is pegged at $202.11 billion, indicating growth of 12.18% from the prior-year quarter’s reported figure. The company has been benefiting from its dominant position in the e-commerce and cloud markets. It is also riding on strengthening generative AI capabilities.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.01 per share, reflecting an upward revision of 3.08% over the past 30 days.
Image Source: Zacks Investment Research
AMZN’s Earnings Surprise History
Amazon has a mixed earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 2.73%. The company’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average surprise being 5.53%.
Our proven model does not predict an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The top-line outlook is likely to have been weighed down by Prime Day shifting into the second quarter, which has trimmed nearly 400 basis points from growth, while foreign exchange is anticipated to have posed an 80-basis-point headwind.
Amazon Web Services (“AWS”) is expected to have remained the primary growth engine and is expected to have strengthened the segment's positioning against rivals like Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Oracle (ORCL - Free Report) in to-be-reported quarter. The momentum is expected to have been supported by a $496 billion backlog that exited the second quarter growing at a triple-digit rate. Trainium adoption, backed by multi-year, multi-gigawatt commitments from Anthropic and OpenAI, is likely to have aided demand. In the third quarter, AWS signed a multi-year strategic collaboration agreement with Cognition, expanded its Salesforce partnership, launched Agentic Grid Planning for utilities and agreed to acquire DuckLabs. However, guidance excludes the energy-derivative gain that boosted second-quarter AWS margins, and capacity shortfalls might have capped upside.
In the North America and International segments, faster delivery speeds, the Amazon Now expansion and rising Alexa for Shopping engagement are expected to have sustained unit growth. During the quarter, Amazon Pharmacy introduced a complete Spanish-language experience.
Nevertheless, elevated transportation costs from fuel inflation and higher line-haul rates are likely to have pressured fulfillment expenses, while the absence of the second quarter’s $600 million tariff refunds and largely expensed Amazon Leo costs are expected to have weighed on profitability.
Advertising, which grew 26% in the second quarter, is anticipated to have benefited from the global expansion of Ads Agent and growing Prime Video live sports inventory. The return of Thursday Night Football to Prime Video in September is expected to have lifted ad revenues toward the end of the quarter.
Capital expenditure remains a key overhang. Amazon has raised its 2026 cash capex outlook to roughly $220 billion from $200 billion, partly owing to higher memory prices, after spending $53.1 billion in the second quarter. Trailing 12-month free cash flow has already turned to a $7.6 billion outflow. In August, the company announced a multi-billion-dollar manufacturing facility in Austin, TX. Rising depreciation from these investments is likely to have pressured third-quarter margins.
Overall, AWS strength and high-margin advertising are expected to support third-quarter results, although Prime Day timing, cost inflation and elevated capex are likely to have tempered the momentum.
Growth Estimates for Q3
The Zacks Consensus Estimate for third-quarter AWS revenues indicates 37.5% year-over-year growth to $45.4 billion.
The Zacks Consensus Estimate for third-quarter online stores is pegged at $69.5 billion, indicating 3.1% year-over-year growth, while subscription-services revenues are projected at $13.6 billion, indicating an increase of 8.8%.
Amazon's physical retail operations are expected to show healthy growth, with the Zacks Consensus Estimate projecting physical store sales of $5.74 billion, indicating a 2.9% year-over-year increase.
Third-party seller services remain a significant growth driver, with the Zacks Consensus Estimate pegged at $44.8 billion, indicating a 5.5% year-over-year increase.
The Zacks Consensus Estimate for third-quarter advertising services revenues is pinned at $20.8 billion, indicating 17.8% year-over-year growth.
AMZN Price Performance & Stock Valuation
Amazon shares have returned 7.9% in the year-to-date period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s decline of 1.9% and 0.3%, respectively.
AMZN’s Year-to-Date Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMZN stock appears overvalued, trading at a forward 12-month price/earnings ratio of 22.64X, higher than the industry’s 19.69X. Amazon has a Value Score of D.
AMZN’s P/E F12M Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Thesis
Amazon’s third-quarter 2026 prospects rest heavily on AWS, which carried a $496 billion backlog and benefited from multi-gigawatt Trainium commitments from Anthropic and OpenAI. High-margin advertising, faster deliveries and the Amazon Now expansion are expected to have supported the retail business. However, guidance for 9-12% sales growth reflects Prime Day timing and foreign exchange headwinds, while fuel-driven transportation costs, Amazon Leo expenses and roughly $220 billion in 2026 capex are likely to have pressured margins and free cash flow. Stiff cloud competition from Microsoft Azure and Google Cloud, coupled with a premium valuation, leaves limited room for any execution missteps.
Conclusion
Amazon’s AWS backlog, Trainium momentum and high-margin advertising provide a fairly solid long-term foundation. However, Prime Day timing, rising transportation costs, Amazon Leo expenses and heavy capex are likely to weigh on third-quarter results. Given stiff cloud competition and a premium valuation, existing investors may hold the stock, while new investors could prudently wait for a better entry point.
View the Zacks #1 Rank List
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Amazon Before Q3 Earnings: Buy the Stock Now or Wait for Results?
Key Takeaways
Amazon (AMZN - Free Report) is scheduled to report third-quarter 2026 results on Oct. 29.
For the third quarter of 2026, Amazon expects net sales between $197 billion and $202 billion, indicating growth of 9% to 12% compared with the third quarter of 2025.
The Zacks Consensus Estimate for net sales is pegged at $202.11 billion, indicating growth of 12.18% from the prior-year quarter’s reported figure. The company has been benefiting from its dominant position in the e-commerce and cloud markets. It is also riding on strengthening generative AI capabilities.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.01 per share, reflecting an upward revision of 3.08% over the past 30 days.
Image Source: Zacks Investment Research
AMZN’s Earnings Surprise History
Amazon has a mixed earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 2.73%. The company’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average surprise being 5.53%.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
Earnings Whispers for AMZN
Our proven model does not predict an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
AMZN has an Earnings ESP of -1.17% and carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping AMZN’s Q3 Results
The top-line outlook is likely to have been weighed down by Prime Day shifting into the second quarter, which has trimmed nearly 400 basis points from growth, while foreign exchange is anticipated to have posed an 80-basis-point headwind.
Amazon Web Services (“AWS”) is expected to have remained the primary growth engine and is expected to have strengthened the segment's positioning against rivals like Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Oracle (ORCL - Free Report) in to-be-reported quarter. The momentum is expected to have been supported by a $496 billion backlog that exited the second quarter growing at a triple-digit rate. Trainium adoption, backed by multi-year, multi-gigawatt commitments from Anthropic and OpenAI, is likely to have aided demand. In the third quarter, AWS signed a multi-year strategic collaboration agreement with Cognition, expanded its Salesforce partnership, launched Agentic Grid Planning for utilities and agreed to acquire DuckLabs. However, guidance excludes the energy-derivative gain that boosted second-quarter AWS margins, and capacity shortfalls might have capped upside.
In the North America and International segments, faster delivery speeds, the Amazon Now expansion and rising Alexa for Shopping engagement are expected to have sustained unit growth. During the quarter, Amazon Pharmacy introduced a complete Spanish-language experience.
Nevertheless, elevated transportation costs from fuel inflation and higher line-haul rates are likely to have pressured fulfillment expenses, while the absence of the second quarter’s $600 million tariff refunds and largely expensed Amazon Leo costs are expected to have weighed on profitability.
Advertising, which grew 26% in the second quarter, is anticipated to have benefited from the global expansion of Ads Agent and growing Prime Video live sports inventory. The return of Thursday Night Football to Prime Video in September is expected to have lifted ad revenues toward the end of the quarter.
Capital expenditure remains a key overhang. Amazon has raised its 2026 cash capex outlook to roughly $220 billion from $200 billion, partly owing to higher memory prices, after spending $53.1 billion in the second quarter. Trailing 12-month free cash flow has already turned to a $7.6 billion outflow. In August, the company announced a multi-billion-dollar manufacturing facility in Austin, TX. Rising depreciation from these investments is likely to have pressured third-quarter margins.
Overall, AWS strength and high-margin advertising are expected to support third-quarter results, although Prime Day timing, cost inflation and elevated capex are likely to have tempered the momentum.
Growth Estimates for Q3
The Zacks Consensus Estimate for third-quarter AWS revenues indicates 37.5% year-over-year growth to $45.4 billion.
The Zacks Consensus Estimate for third-quarter online stores is pegged at $69.5 billion, indicating 3.1% year-over-year growth, while subscription-services revenues are projected at $13.6 billion, indicating an increase of 8.8%.
Amazon's physical retail operations are expected to show healthy growth, with the Zacks Consensus Estimate projecting physical store sales of $5.74 billion, indicating a 2.9% year-over-year increase.
Third-party seller services remain a significant growth driver, with the Zacks Consensus Estimate pegged at $44.8 billion, indicating a 5.5% year-over-year increase.
The Zacks Consensus Estimate for third-quarter advertising services revenues is pinned at $20.8 billion, indicating 17.8% year-over-year growth.
AMZN Price Performance & Stock Valuation
Amazon shares have returned 7.9% in the year-to-date period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s decline of 1.9% and 0.3%, respectively.
AMZN’s Year-to-Date Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMZN stock appears overvalued, trading at a forward 12-month price/earnings ratio of 22.64X, higher than the industry’s 19.69X. Amazon has a Value Score of D.
AMZN’s P/E F12M Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Thesis
Amazon’s third-quarter 2026 prospects rest heavily on AWS, which carried a $496 billion backlog and benefited from multi-gigawatt Trainium commitments from Anthropic and OpenAI. High-margin advertising, faster deliveries and the Amazon Now expansion are expected to have supported the retail business. However, guidance for 9-12% sales growth reflects Prime Day timing and foreign exchange headwinds, while fuel-driven transportation costs, Amazon Leo expenses and roughly $220 billion in 2026 capex are likely to have pressured margins and free cash flow. Stiff cloud competition from Microsoft Azure and Google Cloud, coupled with a premium valuation, leaves limited room for any execution missteps.
Conclusion
Amazon’s AWS backlog, Trainium momentum and high-margin advertising provide a fairly solid long-term foundation. However, Prime Day timing, rising transportation costs, Amazon Leo expenses and heavy capex are likely to weigh on third-quarter results. Given stiff cloud competition and a premium valuation, existing investors may hold the stock, while new investors could prudently wait for a better entry point.