Amazon reports third-quarter earnings Thursday afternoon with more demand for its cloud services than it can serve, driven by AI labs such as Anthropic and OpenAI along with growth in its traditional cloud business.

One big question for Wall Street going into the report is what Amazon might signal about next year’s spending as it tries to keep up with that demand.

CEO Andy Jassy said on an Andreessen Horowitz podcast last week that AWS capacity is largely booked for this year and next, along with “a good chunk of ’28.”

Amazon has said it expects to spend about $220 billion on capital expenditures this year, largely on AI and cloud infrastructure, up from its earlier plan of $200 billion. Even at that level, Jassy said, Amazon is “leaving a meaningful amount of demand on the table.”

Past spending pushed Amazon’s free cash flow to negative $7.6 billion for the 12 months ending in June, as the cost to add data centers, chips and other equipment exceeded the cash its operations brought in. Jassy gave no indication of slowing down, saying the company “could invest a lot more and it wouldn’t be a bad use of capital.”

Core numbers: Analysts expect revenue of about $202 billion, up 12% from a year ago, according to Yahoo Finance. That’s at the top of Amazon’s own forecast of $197 billion to $202 billion.

Analysts expect earnings of $1.96 per share, about the same as a year ago.

Amazon’s sales growth will likely look slower this time, about 12%, down from 20% last quarter. A big reason is timing. Prime Day, the company’s biggest sales event of the year, fell in the second quarter this year, rather than the third quarter as it did last year, so this quarter is up against a tougher comparison.

Amazon estimated in July that the shift would take nearly 4 percentage points off its growth rate this quarter. It hits online store sales hardest: analysts expect them to grow only about 3%, according to Zacks.

AWS: Amazon Web Services, the company’s cloud business, generates the majority of its operating profit. AWS revenue grew 37% to $42.2 billion in the second quarter, its fastest pace since 2021 and the fifth straight quarter of faster growth.

Analysts expect AWS revenue of about $45.4 billion this time, up 37.5%, according to Zacks. Wedbush is more optimistic, projecting growth of about 41%.

AWS had $496 billion in signed contracts it hadn’t yet delivered as of June, more than double the year before. That means its growth depends largely on how quickly Amazon can bring new data centers online.

“Capacity, not demand, is the constraint,” Yorkville Ives analyst Dan Ives wrote of the industry in a note Sunday.

Jassy said on the a16z podcast that running AI models is still “an order of magnitude too expensive” for businesses to use them widely, and that Amazon’s custom chips, including its Trainium AI processors, are a big piece of bringing that cost down. Amazon said in July that its chip business was on pace for more than $25 billion in annual revenue.

Anthropic stake: Amazon’s reported earnings could look very different. That’s because its profit fluctuates significantly depending on the value of its stake in Anthropic.

Last quarter, $53.4 billion in pre-tax gains, mostly on Anthropic, pushed Amazon’s earnings to $5.75 per share, against expectations of $1.82.

Anthropic filed paperwork Monday for a planned IPO on the Nasdaq. Amazon’s stake in the AI company was valued at about $190 billion as of June 30, according to Amazon’s latest quarterly filing. That includes about $92 billion in gains on convertible notes, a form of loan that turns into stock, which haven’t yet been counted in Amazon’s profit. Those notes would convert to Anthropic stock when it goes public.

Anthropic is also one of Amazon’s biggest cloud customers. Its IPO filing shows commitments to spend at least $110 billion on Amazon’s computing capacity into the 2030s, behind the $114.5 billion it committed to Google, as GeekWire reported Tuesday. Anthropic also said in the filing that it has asked its cloud providers for more computing power than they were willing to supply.

Shopping agents: Amazon blocked Meta’s new Muse AI agent from its store last month, escalating a fight over who controls the customer relationship when software does the buying. Amazon said Muse broke its rule requiring agents to identify themselves.

Agents that shop on a customer’s behalf could bypass Amazon’s advertising business, which depends on people browsing its pages. Ad revenue grew 26% to $19.8 billion last quarter, and analysts expect about $20.8 billion this time, up 18%, according to Zacks.

“Investor questions remain on agentic commerce risk, particularly to advertising, but we see limited risk,” Wedbush analyst Ygal Arounian wrote in an Oct. 16 note, citing Amazon’s logistics advantage and its role connecting shoppers with sellers.

Amazon is trying to give shoppers fewer reasons to look elsewhere. It now lists 250 million products sold on other retailers’ sites, about 2.5 times as many as in March, The Information reported Wednesday. On the seller side, Amazon opened its tools to outside AI agents in September, starting with Anthropic’s Claude.

Cloud rivals: Microsoft and Alphabet report quarterly results Wednesday afternoon, a day before Amazon. Microsoft’s report is its first under a new structure that breaks out Azure cloud revenue every quarter.

Check back with GeekWire on Thursday afternoon for coverage.

Amazon says it plans to hire more than 300,000 people for seasonal, part-time and full-time roles across its U.S. operations this holiday season, an increase of 20% from last year and its largest holiday hiring target on record.

The increase reflects a mix of factors, including new sites opening across the country as Amazon expands its operations network, a spokesperson said in response to questions.

Amazon is moving in the opposite direction from the rest of retail. Retailers added the fewest seasonal workers since 2008 last holiday season, and outplacement firm Challenger, Gray & Christmas expects even fewer this year, citing automation and uncertain holiday spending as tariffs keep prices high.

UPS plans to hire more than 100,000 seasonal workers, about 9% fewer than last year, according to Reuters, after cutting the volume it handles for Amazon, which now delivers most of its own packages. Target and Walmart haven’t announced national hiring goals.

Amazon’s sales volume has picked up this year. Worldwide paid units, a measure of items sold on Amazon, grew 17% year-over-year in the second quarter, up from 12% a year earlier, according to its second-quarter earnings release.

CEO Andy Jassy said in the earnings release that Amazon set record delivery speeds for Prime members in the first half of the year, with “over 40% more items delivered same-day or overnight.”

Amazon also said Tuesday that seasonal employees who work at least 30 hours a week will be eligible for healthcare from their first day, starting Jan. 1. Seasonal workers previously had to wait 90 days for coverage, meaning that many holiday hires could finish their seasonal jobs before they became eligible.

The change doesn’t apply to the upcoming peak season, but workers hired over the holidays who are still in qualifying roles on Jan. 1 will gain coverage that day, the company said.

Seasonal workers earn an average of $20 an hour. Full-time operations employees start at a minimum of $20 an hour, and average pay across Amazon’s operations workforce is nearly $24, following a pay increase Amazon announced last month.

The hiring push for Amazon’s fulfillment centers and delivery stations comes as the company shrinks its corporate workforce. Amazon cut 16,000 corporate jobs in January, bringing its total reductions to about 30,000 since October 2025.

Amazon had about 1.6 million employees as of June 30, up 3% from a year earlier, excluding contractors and temporary workers. The company reports third-quarter results Oct. 29.

Amazon blocked Meta’s Muse AI agent from its store Sunday night, and leaders across the tech industry have spent the past two days debating the bigger questions raised by the move.

Among them: whether the big platforms will agree on rules for agents crossing into each other’s territory, how money will change hands when they do, and how many people will actually want AI agents doing their shopping in the first place.

This will be “a bigger battle than anyone anticipates,” wrote Palo Alto Networks CEO Nikesh Arora in a post on X, predicting that Apple, Google and possibly TikTok will build their own personal agents. Every shopping and services app will have to decide whether to let outside agents in, he wrote.

The industry is “basically two weeks into this entire topic,” Box CEO Aaron Levie said on CNBC Tuesday morning. Agents are “going to change how we interact with most forms of commerce,” he said, and “different companies will respond in different ways.”

Elon Musk is already pointing to a potential technical loophole. Amazon “won’t be able to tell whether the buyer is a human or an AI acting on their behalf if access is via the user’s IP address & cookies,” the xAI founder wrote on X Monday.

Amazon’s Conditions of Use require agents to identify themselves as agents in every request they make to its site. That is one of the violations that Amazon cited in blocking Muse this weekend.

Deals in the works? Amazon CEO Andy Jassy has said on earnings calls that the company was having conversations with companies that want to run agents for commerce. Those talks are still underway, The Information reported Monday, but it’s not clear whether any agreements are close to happening.

Meta CEO Mark Zuckerberg said on the Sources podcast that Muse would “take a very small cut of whatever the transaction is” — potentially paid by the businesses users buy from.

Amazon’s retail margins are thin, and its advertising business, which generated more than $68 billion in revenue last year, depends on people browsing its pages, not agents jumping in to complete purchases.

Amazon vs. Perplexity: Possibly foreshadowing where the Meta dispute is headed, Amazon sued Perplexity in November over Comet, the AI company’s browser, which had an agent that shopped on Amazon.com through customers’ own accounts.

Amazon won a preliminary order blocking it in March, then lost that order on Aug. 4, when the Ninth Circuit found Amazon unlikely to win its anti-hacking claim, because the user — not the AI company — was the one accessing Amazon’s computers. The court denied Amazon’s request for a rehearing on Sept. 10.

The underlying case is still going, and the decision did leave Amazon an opening. It said Amazon could still sue over its contract with customers, and on Monday Amazon did just that: adding a claim that Perplexity caused customers to break that agreement, the same Conditions of Use the company used to block Muse.

What about Amazon’s agent? The e-commerce giant’s Buy for Me agent “does some of the things that Amazon is trying to stop other AI agents from doing,” pointed out journalist Jason Del Rey, who publishes The Aisle newsletter. Amazon’s answer is that Buy for Me identifies itself and lets brands opt out, two things it says Muse doesn’t do.

Meta, for the record, has not responded publicly to the Amazon dispute. But investors have. Meta stock jumped 11% Monday to its highest close in a year, and rose again Tuesday morning.

After all of this, are agents really better shoppers? Martin Peers of The Information used Muse on Monday to buy a pen and a notebook from small retailers. He found the process “surprisingly smooth,” but wrote that it was “still a lot faster and easier to go directly to Amazon.”