$AMZN · Schwab Network · 2026-10-30

Now, Amazon shares are still down about 2%, but I had conversations this morning with people who said they believe there is a chance that performance could turn positive by the end of the day.

Obviously, we didn't get that, but I'd like to know your impressions of the results. Were they really as bad as they're portrayed, or is it just the surrounding negativity?

Yes, I definitely think the market is overreacting at the moment . You know, based on the numbers, Amazon has actually changed the date of "Prime Day" from July to June. Therefore, what was supposed to be part of the third quarter results has now moved to the second quarter.

This actually led to a 400 basis point reduction in the third quarter results. But if we add those 400 basis points back to the profits of online stores , it turns out that they have already exceeded expectations .

The same applies to online advertising revenue as well.

So, it seems that the market is currently grappling with this problem and trying to come to terms with the fact that they have a successful cloud business similar to Google's. But this will come at a significant cost to their core business and profitability .

The fact that this may come at the expense of what they consider their primary sources of income. Do you think this is the case, or is this assessment somewhat exaggerated?

If you look at them all, yes, you know that Amazon invested $200 billion in AI infrastructure in 2026. That definitely consumes a portion of the cash flow. But this is actually perfectly normal.

I think they are investing in the right area, because with the arrival of artificial intelligence as a powerful wave, you can either stay on top or disappear. I think these big companies are actually doing the right thing.

As we look at that, I mean with free cash flow turning into an outflow of more than $42 billion, they have about $220 billion in capital spending, which you think is getting close to the right numbers here.

If we compare that to AWS and its massive order book of over $575 billion or so, Andy Jassey says they are acquiring customers and operational capacity at roughly the same rate that Amazon can provide.

How long do investors have to wait to prove your hypothesis that this will deliver returns that justify the investment?

Yes, first and foremost, I think we're going to see a very strong fourth quarter for Amazon, especially when you see the size of the incentives they're putting in the market right now.

As you know, "Markabel" is a company geared towards content creators. We have seen additional incentives offered by Amazon to content creators. They note that social media is driving a large portion of sales at the moment .

Also, over the past four months, this is the first time we have seen consumer confidence truly recover following a slight decrease in fuel prices and a return to normal consumer shopping behavior .

Amazon offers many incentives to social media influencers that are not offered by other retailers. Therefore, I believe they will continue to be at the forefront of current e-commerce and artificial intelligence trends.

I think we should be looking forward to a very strong fourth quarter.

Joy, what kind of company do you think Amazon will be in the future? I mean five to ten years from now, because I heard someone asking a question on another financial network this morning about whether retail will disappear, and I thought it was an interesting question, because if you ask anyone on the street what Amazon does, they will think of the e-commerce platform .

They may not mention AWS, but in the financial markets, this is how investors currently value the company . So, there seems to be some kind of disconnect, but if Amazon is now saying we're an AI company because AWS is thriving, how much importance should we place on retail in the future?

Yes, I truly believe that any company, in the end, in order to remain in the market, will have to become an artificial intelligence company. So, I definitely believe that Amazon is an AI company, and so are Google and Meta.

They are all AI companies after all, because without AI you can't really expand into the world of the internet. It does n't matter whether it's about AWS or online retail. I believe their massive investments in artificial intelligence demonstrate their commitment to growing their AWS and online retail business.

In fact, if you think about Amazon, the retail aspect is just a traffic engine. People want to buy and go somewhere, don't they? But how can you display product recommendations?

And how do you get people to use AWS servers? All of this actually depends on artificial intelligence algorithms . Such as AI-based targeting . Therefore, any company in the future will have to be an artificial intelligence company .

Enjoy, you said you were expecting a strong fourth quarter . Some of that is related to how well they performed on Prime Days, which I noted were not included in this quarter’s results.

Of course, we have the upcoming "Cyber Five" period. So, when you look at holiday spending, which is so important, what do you watch most closely to determine whether it's holding up and whether it's going to be a really strong fourth quarter ?

Yes. If you think about how people make online purchasing decisions, right? You can either search in the retailer's app, discover and search on Google, or go to social media to view the content.

In the past, social commerce accounted for about 6 to 7% of total e-commerce sales , but we have projections indicating that it will reach 30% within a few years. Looking only at marketable content creators , last year we generated $1 billion in sales for retailers, and this year we're generating $2 billion.

So, I really think that traffic is moving from the real world to the internet, and where is internet traffic located? Are they within retailer apps or on social media? It is clear that people are spending more and more time on social media.

Therefore, I believe that with Amazon providing the right incentives for content creators, and knowing that they are already struggling to transfer 4% of their Q3 results to Q2, they are facing a decline in Q3 results .

Therefore, they are now investing heavily and offering more incentives to boost fourth-quarter results. Therefore, based on what I see, I have a strong belief that the fourth quarter will be very strong.

More recently, Amazon has already blocked Meta News Agents from accessing its shopping site. I wonder how these custom robots will be handled. Yesterday I referred to Gene Munster , a technology analyst who said that custom robots will make it easier for people to find things.

We are already seeing that happen. Amazon excels for several reasons; She finds what she wants, is fast , and is trustworthy. But the first part, which is finding what you want, may be under threat at the moment . Do you see this as a problem for Amazon?

I think Amazon actually, as you know, has a very large department for content creators. They are currently investing heavily in driving social traffic to Amazon, and are already seeing one of the highest ancillary revenues compared to many other divisions within Amazon.

They are among the most advanced in social commerce infrastructure today compared to many other retailers. There are many other retailers who rely on third-party systems, or external agencies, to help them grow their content creator programs, but Amazon is a special case.

They started their content creator program more than a decade ago and have their own affiliate system. Therefore, it is very easy for them to track incoming additional revenue and its source thanks to their fully integrated artificial intelligence system .

So they are investing the right money and incentives in the right place now . I think that thanks to Amazon's strong DNA in e-commerce, they know where to put their money.