According to Woofun AI, Goldman Sachs (GS.US), in its quick review of Amazon's (AMZN.US) earnings report released on October 29, 2026, identified the slowdown in AWS growth as a key focus. Despite strong performance in its cloud business, the actual growth rate of 39.3% fell short of the 42%+ threshold set by buy-side analysts, leading to an initially negative market reaction, as investors expressed disappointment over the gap between high expectations and the reported growth.
The deep dive into cloud business performance shows that AWS generated $45.98 billion in revenue in the third quarter—a figure that exceeded both Goldman Sachs’ own forecasts and sell-side consensus, yet fell short of the over 42% growth rate repeatedly emphasized by buy-side analysts prior to the earnings release. This discrepancy between the two sets of expectations serves as a key clue to understanding short-term market sentiment. Goldman Sachs noted that the company’s forward commentary referencing an approximate 40% growth target for AWS in 2027 and 2028 indicates that market focus has shifted from whether demand exists to the efficiency of meeting new demand for computing capacity.
Woofun AI's compiled data shows that Goldman Sachs highlighted compute supply as a key focus in the earnings call, as customer demand must be supported by available computing capacity, and the pace of new capacity deployment directly impacts revenue recognition. Visibility of demand, construction progress, and revenue realization must be closely aligned along the same growth trajectory.
In addition, Goldman Sachs is closely monitoring Bedrock’s and Trainium’s strategic positioning—Bedrock as Amazon’s generative AI service platform and Trainium as Amazon’s in-house AI training chip—both initiatives designed to capture industry AI spending through services and infrastructure in response to evolving market demands.
In terms of overall financial performance, Amazon's third-quarter total revenue was $201.94 billion, a 12.1% year-over-year increase, slightly above Goldman Sachs' forecast of $201.51 billion but below the market consensus of $202.35 billion. Sales volume was close to original expectations, with key operational highlights centered on profitability. Under U.S. GAAP, operating profit reached $28.1 billion, exceeding both the market expectation of $26.16 billion and the upper end of the company’s prior guidance, resulting in an overall operating margin of 13.9%, demonstrating strong profitability amid steady revenue growth.
Looking at individual businesses, AWS generated an operating profit of $17.77 billion with a margin of 38.7%, making a significant contribution to overall profitability; North American operations generated an operating profit of $8.72 billion with a margin of 7.7%; international operations generated an operating profit of $1.58 billion with a margin of 3.7%. Goldman Sachs identified cloud, advertising, third-party merchant services, and subscriptions as high-margin business expansion areas, whose growth rates directly impact the group’s ability to convert sales growth into profits. In the third quarter, online store revenue reached $68.47 billion, up 1.6% year-over-year, while third-party merchant services revenue reached $46.49 billion, up 9.4% year-over-year—the difference in growth rates highlights the distinct focus between platform services and retail commerce within the group.
Subscription service revenue amounted to $14.01 billion, representing an 11.4% year-over-year growth; advertising service revenue reached $19.64 billion, up 10.9% year-over-year. These businesses are closely tied to consumers, merchants, and platform traffic, influencing both revenue structure and the stability of the group’s profitability. Goldman Sachs listed consumer health as a key topic of interest in the earnings call, noting that consumer demand translates into product sales, merchant operations, and advertising spending. The firm also closely monitors changes in the involvement of intelligent agents in shopping, exploring how AI agents are shaping the evolution of commercial activities and the ways consumers discover and purchase goods.
Regarding forward guidance and investment recommendations, Amazon reaffirmed its 2026 capital expenditure target of approximately $220 billion. Goldman Sachs has identified future capital needs, spending allocations, and financing methods for computing power expansion as key items to monitor. While ongoing investments create conditions for growth, they also impose higher demands on cash outflows and operational returns. The fourth-quarter total revenue guidance is set at $240 billion to $247 billion, including a negative 0.6 percentage point impact from exchange rates; the market consensus is $244.4 billion, which falls within the guidance range, indicating that the company’s revenue outlook broadly encompasses prior market expectations. Operating profit guidance is set at $28.5 billion to $33.5 billion, with a market consensus of $32.9 billion. Goldman Sachs noted that the upper end of the range slightly exceeds consensus, but the midpoint implies an operating margin of 12.7%, below the market’s expected 13.5%. The flexibility in profit guidance should be understood in the context of continued investments.
Goldman Sachs maintains a Buy rating with a 12-month price target of $375, citing increased competition, slower-than-expected expansion of high-margin businesses, and new business investments pressuring margins as key risks. The company must sustain competitiveness in its cloud business while ensuring continued growth in advertising, subscriptions, and merchant services, as overall profitability depends on the collective contribution of multiple business segments. This earnings report highlights the tension between strong growth and high expectations: compute infrastructure sets the upper limit for AWS growth, while retail and advertising determine the potential for profit retention. Amazon’s next focus is to effectively align compute infrastructure development, business growth, and profit returns, delivering strong results on both fronts simultaneously.