Vandita Jadeja
5 min read
Quick Read
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Amazon hit a record 13.9% operating margin, but a $42.4 billion trailing free cash outflow drove shares down 7% in premarket trading.
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Microsoft’s Azure grew 48% with a 47% operating margin, while Alphabet’s cloud surged 103%, though equity gains inflate its earnings.
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Fresh results from Amazon (NASDAQ:AMZN) show an operating margin of 13.9%, the highest in its history. Even so, the stock was down 6.72% in Friday premarket trading at $227.40.
The number investors keep coming back to is a trailing 12-month free cash outflow of $42.4 billion, driven by AI infrastructure spending. Amazon’s 24/7 Wall St. price target sits at $377.20. That means 54.72% upside from Thursday’s close and 65.9% from the premarket level.
24/7 Wall St. Price Target Summary
That is a high-conviction rating. The selloff reflects concerns about cash flow, while AWS demand looks as strong as it has in years.
AWS Speeds Up as Shares Slide
Amazon shares are down 9.18% over the past week and 7.81% over the past month, and they are 1.48% lower year to date. The 52-week range runs from $196 to $287.20. CNBC reported that the stock fell in premarket trading as pressure mounted after earnings.
Third-quarter revenue came in at $201.94 billion, up 12.1% and slightly short of the $202.20 billion estimate. GAAP EPS of $1.89 missed consensus of $1.9579. Operating income, however, rose 61.2% to $28.08 billion.
AWS revenue grew 39% to $45.98 billion, its fastest pace in nearly five years. Capex reached $77.26 billion in the quarter, and full-year 2026 guidance went up to about $220 billion from $200 billion.
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