Amazon (AMZN.US) AWS growth rate falls short of 42% expectations, Goldman Sachs: profit exceeds expectations

According to Woofun AI, Goldman Sachs (GS.US) listed the AWS growth gap as a core observation point in the Amazon (AMZN.US) quick financial review released on October 29, 2026. Despite the strong performance of the cloud business, the actual growth rate of 39.3% failed to cross the 42% growth threshold set by the buyer, causing the initial market reaction to be negative, and investors were disappointed with the gap between high expectations and strong growth.

In-depth analysis of the cloud business shows that AWS achieved revenue of 45.98 billion US dollars in the third quarter. Although this figure surpassed Goldman Sachs's own and sellers' consensus predictions, it was still below the 42% growth level repeatedly emphasized by buyers before the financial report. The difference between the two sets of expectations became a key clue to understanding short-term market sentiment. Goldman Sachs pointed out that the company's forward-looking review mentioned AWS's growth target of about 40% in 2027 and 2028, indicating that the market's focus has shifted from whether demand exists to the efficiency of demand for new computing power services.

According to data compiled by Woofun AI, Goldman Sachs listed the supply of computing power as the focus of the conference call because customer demand needs to be handled by available computing power, and the pace of new capacity launch directly affects the speed of sales confirmation. Demand visibility, construction progress, and revenue release must closely cooperate on the same growth path.

Furthermore, Goldman Sachs is closely monitoring the strategic layout of Bedrock and Trainium, which is Amazon's generative AI service platform, and the latter is a self-developed AI training chip. These two initiatives aim to handle the industry's AI expenses through services and infrastructure to meet changing market needs.

In terms of overall financial performance, Amazon's total revenue for the third quarter was US$2019.4 billion, up 12.1% year on year, slightly higher than Goldman Sachs's forecast of US$2015.1 billion, but lower than the market consensus of US$202.35 billion. The sales scale was close to the original expectations. The operating highlights were mainly on the profit side. According to US GAAP, operating profit reached US$28.1 billion, which not only exceeded market expectations of US$26.16 billion, but also exceeded the upper limit of the company's previous guidelines. The overall operating margin was 13.9%, showing strong profitability in the context of steady revenue growth.

By business, the operating profit of AWS was US$17.77 billion, with a profit margin of 38.7%, which contributed significantly to the overall profit; the operating profit of the North American business was US$8.72 billion, with a profit margin of 7.7%; and the operating profit of the international business was US$1.58 billion, with a profit margin of 3.7%. Goldman Sachs lists cloud, advertising, third-party merchant services, and subscriptions as a high-profit business expansion direction. The growth rate directly affects the Group's ability to turn sales growth into profit. Online store revenue for the third quarter was US$68.47 billion, up 1.6% year on year, while revenue from third-party merchant services was US$46.49 billion, up 9.4% year over year. The difference in growth between the two highlights the different focus of platform services and product retail in the group.

Revenue from subscription services was US$14.01 billion, up 11.4% year on year; revenue from advertising services was US$19.64 billion, up 10.9% year over year. These businesses are closely linked to consumer, merchant and platform traffic, which not only affects the revenue structure, but also relates to the stability of the Group's profits. Goldman Sachs listed consumers' health as a focus of the conference call, believing that consumer demand will be transmitted to product sales, business operations, and advertising. At the same time, it also focuses on changes in the participation of intelligent agents in shopping, and discusses how AI agents influence commercial activities and the evolution of how consumers search for and buy products.

In terms of forward-looking guidance and investment recommendations, Amazon reiterated that the capital expenditure for 2026 is approximately US$220 billion. Goldman Sachs has listed future capital requirements, expenditure arrangements, and financing methods for computing power expansion as important tracking matters. Although continuing construction provides conditions for growth, it also places higher demands on cash investment and operating returns. The total revenue guidance for the fourth quarter was 240 billion to 247 billion US dollars, including the negative impact of the exchange rate of 0.6 percentage points. The market consensus was 244.4 billion US dollars, which fell within the guidance range, indicating that the company's overall revenue range covered the original market expectations. The operating profit guideline is US$28.5 billion to US$33.5 billion, and the market consensus is US$32.9 billion. Goldman Sachs indicated that the upper limit of the range was slightly higher than the consensus, but the median implied operating margin was 12.7%, lower than the 13.5% expected by the market. The flexibility of profit guidance needs to be understood in conjunction with continued investment.

Goldman Sachs maintained its buying rating and set a 12-month target price of $375, while citing increased competition, falling short of expectations in high-profit business expansion, and new business investment suppressing profit margins as the main risks. The company needs to ensure that advertising, subscription and merchant services continue to grow while maintaining the competitiveness of the cloud business. The group's profit depends on the joint contribution of many business results. The differences in this financial report focus on strong growth and high expectations. Computing power construction determines the maximum growth rate of AWS, and retail and advertising determine profit storage space. Amazon's next focus is to effectively link computing power construction, business growth, and profit returns, and hand over answers on both lines at the same time.