Amazon (NASDAQ:AMZN) Achieves Record Operating Margin as AWS Growth Hits Near Multi-Year High

Aditi Sarkar

11 November 2026 03:14 PM AEDT

Amazon (NASDAQ:AMZN) Achieves Record Operating Margin as AWS Growth Hits Near Multi-Year High

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Highlights

Q3 2026 net sales rose 12% to $201.9 billion, with Operating Income surging 61% to $28.1 billion — representing Amazon's highest-ever Operating Margin at 13.9%.
AWS net sales grew 39.3% year-over-year to a $184 billion annualised Revenue run rate, its fastest growth in nearly five years.
Amazon Ads generated $19.6 billion in Q3 revenue, up 12% year-over-year, with high-teens growth expected in Q4.
Full-year 2026 Capital Expenditure guidance remains approximately $220 billion, with management projecting AWS growth above 40% in both 2027 and 2028.

Amazon (NASDAQ:AMZN) reported record third-quarter 2026 results, achieving its highest-ever operating margin while sustaining double-digit top-line growth across retail, cloud, and Advertising segments. CEO Andy Jassy highlighted AWS acceleration and ongoing AI infrastructure Investment as central to the company's Long-term Growth strategy.

Record Operating Margin Reflects Broad Efficiency Gains

Net sales for Q3 2026 totalled $201.9 billion, up 12% from $180.2 billion in the same quarter of 2025, though the results were partly affected by the timing of Prime Day, which occurred in Q2 this year rather than Q3. Adjusting for this shift, year-over-year growth would have been approximately four percentage points higher. Operating income rose 61% to $28.1 billion, with operating margin reaching a record 13.9%, up from 9.7% a year earlier. Diluted Earnings per Share were $1.89, down slightly year-over-year, reflecting swings in Other income. Cash and cash equivalents stood at $55.8 billion.

AWS Accelerates to Near Five-Year High Growth Rate

Amazon Web Services reported net sales growth of 39.3% year-over-year, its fastest rate in nearly five years, reaching a $184 billion annualised revenue run rate. AWS's operating margin was 38.7%, demonstrating the high profitability of the cloud infrastructure segment. The company signed new AWS agreements with Meta, NVIDIA, OpenAI, Salesforce, Oracle, Qualcomm, Verizon, ADP, and Stripe during the period, expanding its enterprise customer base. Total token Volume on Amazon Bedrock, its AI model hosting platform, surged approximately 17x year-over-year. Management guided AWS revenue growth to remain above 40% in both 2027 and 2028.

AI Infrastructure Investment Continues at Scale

Amazon's capital expenditure for Q3 alone was $75.9 billion, with full-year 2026 capex guidance of approximately $220 billion. The company's Graviton and Trainium custom chip programmes saw revenue commitments each rise more than 20-fold year-over-year, and customers using Amazon's custom silicon saved more than $2 billion during the quarter.

Retail and Advertising Sustain Momentum

North America segment revenue rose 6% to $112.9 billion, while International revenue increased 8% excluding foreign exchange effects to $43.1 billion. Worldwide paid units grew 12%. Amazon Ads generated $19.6 billion, up 12%, with management expecting advertising revenue growth to return to the high teens in Q4. Delivery speed hit record levels, with more than 1.5 billion items delivered same-day or overnight to Prime members. Amazon Now, the ultra-fast delivery service, expanded to over 450 towns and cities globally, with volume up 10x year-over-year. For Q4 2026, Amazon guided net sales of $240 billion–$247 billion, representing 12%–16% growth.

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