How much is too much for Amazon to invest in AI? Key takeaways from Q3 2026 Earn
By Andreakleigh · October 31, 2026 · Curated by George's Blog
How much is too much for Amazon to invest in AI?
Key takeaways from Q3 2026 Earnings (after having listened to 40+ of these...)
✔️AWS/AI/Agents got an alarming 105 mentions. FCF took a nosedive as they dumped $175B+ on AI infrastructure (ouch)
✔️ALEXA FOR SHOPPING: Lots of exciting but kinda made-up metrics about Alexa for Shopping: 400M customers using Alexa for shopping TTM. 570% y/y increase in interactions. Those using it spend 50% more.
✔️CONSUMABLES/"EVERYDAY ESSENTIALS" FOR THE WIN: Growing 3x faster than the rest of Amazon's store, 50% of all units sold in Q3 (but who knows what "Everyday Essentials" actually are)
✔️PEOPLE ARE BUYING CHEAPER STUFF: This could be mix shift to consumables or shoppers choosing lower priced alternatives (unit sales grew faster than Online Stores net revenue)
✔️WONKY COMPS: There was some (likely deliberate) wonkiness in the commerce and advertising y/y growth numbers because we're comping a Prime Deals quarter last year (I bet the moving target of Prime Day is getting REAL annoying internally from a reporting standpoint)
✔️COMMERCE SHRINKING RELATIVE TO OTHER BUs: Commerce is becoming less important (Online stores and 3P Seller Services represented only 37% of their total Net Revenue) and only grew 1.6% y/y (see above about wonkiness tho)
✔️AD GROWTH SLOWED BUT STILL OUTPACES COMMERCE GROWTH: Yet Advertising Revenue growth at 10.9% continues to outpace Online Stores revenue growth (likely more brands considering Amazon a media platform + non-endemic advertising)
Side note - Andy Jassy and Brian Olsavsky disclosed way more than usual. They missed guidance/expectations on both revenue and profit - prob trying to pre-manage bad press.
What did you think? What did I miss? ⬇️Comment below! ⬇️
#ecommerce #amazon #ai #aws #retailmedia #topretailexpert Rethink Retail