An Amazon delivery vehicle drive along a street in downtown San Francisco, California, U.S. [Photo Credit: Reuters]

Amazon, opens new tab on Thursday reported a massive cash burn in the third quarter, sending shares sharply lower, while it signaled higher capital expenditures next year atop an already ​huge amount in 2026.

Amazon’s cloud computing cash cow, Amazon Web Services, continued to accelerate, but the company’s aggressive spending to capture AI demand overshadowed broader growth that ‌investors typically crave — with more such spending to come.

The Seattle-based retailer expects revenue between $240.0 billion and $247.0 billion in the fourth quarter, bracketing estimates of $244.51 billion, according to LSEG, but its midpoint of $243.5 billion came in slightly lower.

Investors soured on the company, driving shares down as much as 7% in extended trading, and the shares had declined 4.3% in regular trading to end at $243.79. The drop mirrored a broader selloff among tech stocks on Thursday ​after Intel INTC.O warned of flagging PC revenue through next year’s first half, sending its shares down 23% in after-hours trading. Alphabet (GOOGL.O), opens new tab shares fell 12% during the regular session, their ​worst single-day percentage decline ever.

The company said it burned $42.4 billion on a trailing 12-month basis in the September quarter, driven by capital expenditure ⁠of $77.26 billion, which was some $20 billion above estimates, according to data compiled by LSEG. Amazon reported cash burn of $7.6 billion in the prior quarter, and generated $14.8 billion in the third quarter of ​last year.

Like competitors, Amazon has made a huge spending commitment to developing AI software and infrastructure, forecasting $220 billion in capital expenditures this year. Amazon and Google parent Alphabet have maintained their spending expectations, though Microsoft (MSFT.O), opens new tab on Wednesday lowered its own to $170 billion from $175 billion.

CEO Andy Jassy told analysts on a conference call he expected capital expenditures to ​be “meaningfully more” next year, compared with 2026, without elaborating.

Jassy tried to lessen investor concerns following the results. “Our strategy is working and I expect it will for the foreseeable future,” he said. ​He said AWS could reach a trillion dollars in revenue in as little as five years, adding, “our AWS investment in functionality and infrastructure is working.” He also said, “I’m not aware of another retail business approaching Amazon’s ‌revenue size.”

Still, ⁠Jesse Cohen, a senior analyst at Investing.com, also pointed to Amazon’s free cash flow and “weak guidance” as reasons for the share decline. “Amazon’s third-quarter report landed as a double disappointment.”