Schwab Network on $AMZN (Oct 29, 2026)

Let's start with Amazon first. We are seeing its share price rapidly falling , having already fallen by 6.5 percent. Let's look at their third quarter EPS, which came in at $1.67.

This is actually lower than expected. The market expectation was $201. I'm looking here, um, I want to make sure if this is correct or not. Wait a minute. It's $1.89. This is also lower than market expectations.

The forecast was $1.97. I want to make sure we have the correct information.

Um, we're looking at their net sales here at $201.9 billion, which is also lower than expected. The market expectation was $202.26 billion. So, we are seeing a deficit here in terms of revenue and in terms of profit.

Um, when we look at their North American net sales , which are $112.85 billion, that's also low. The market was expecting $113 billion.

Um, Amazon Web Services' net sales came in at $45.98 billion. Um, that's slightly better than the market expectation of $45.68 billion. Um, their free cash flow has dropped to $42.4 billion in the last 12 months.

Um, and they're estimating net sales for the next quarter to be between $240 and $247 billion. But in my opinion, the share price is now down 11 percent, and I remember yesterday, when I repeatedly said in the case of Alphabet that I did not expect such a large deficit.

Um, but this seems like a pretty familiar situation.

KG, did you expect such a result from Amazon ?

Um, no. Um, I didn't expect that from a cloud or AWS perspective. This is much as the market expected. I'm a little more concerned about North American sales, because I think it's a direct reflection of the situation for ordinary consumers.

We must be careful. They have suffered a negative impact of about one billion or 900 million dollars due to currency exchange rates. So, that's probably affecting analyst expectations which is what we're seeing here.

Um, but anyway, we're seeing shortages in their core business areas. And unfortunately, we are seeing share prices go down. So, I didn't expect the published statistics to be so weak.

Especially when you're looking at Amazon. However, I'm a little more concerned about retail than AWS. AWS was pretty much as expected. I wonder what their direction is going to be in the coming days.

Yes, when we look at their guidance , they are giving a sales range of $240 to $247 billion for the fourth quarter, which seems to be pretty consistent with market expectations.

This is about 244 billion, very close to the midpoint. But despite this negative cash flow, they say their capital expenditure (CapEx) is expected to be around 220 billion , a repeat of their previous estimate.

Sam, what do you think is the most important thing here? Because yesterday we raised similar concerns about Alphabet. However, we see some different things in this report. Their operating margin has increased to 13.9 percent this year, compared to 12.9 percent.

This is their highest ever. So, there are definitely some different things in this report.

Yes, it's like a mixed reaction, but the topic feels like 'deja vu' because I was watching what technology analyst Gene Munster had to say about it today. He thinks Google's results were a warning to today's Amazon investors.

He has previously said that the market will likely not pay much attention to that expected December guidance tonight, as the long-term risks of personal bots are becoming increasingly real for businesses.

Part of this is reflected in today's drop in Amazon's share price.

The Nasdaq also suffered losses, losing 1.5 percent. He believes personal bots will make it easier to find what you need and make them a logical starting point for any purchase.

Amazon is ahead for three reasons. Finding what you need, speed and trust. However, he says, the first reason will gradually come under attack.

And I think, agreeing with KG's point , I'm more concerned about the retail side because we're seeing some concerns about the core businesses , which is mainly due to the huge spending on AI.

We know that this company is clearly spending a lot of money. Today's confirmation suggests that this is reducing their cash flow. We know that it had already gone negative. Before it started, there was an expectation that this would continue.

And it's also important to mention the staff layoffs that have been going on as part of this for the past 4 years.

and Amazon is down 5.5%.