Good morning. QQQs -2.5% / SPX -1% on one of the worst nights for Tech earnings I can recall in a long time. INTC -25% whiffed on PCs; AMZN -7% missed AWS but Jassy tried to make up for it with a 40% ‘27/’28 guide although that still sits below buyside; SNDK -8% on a decent print but with plenty of nits; RDDT -20% just horrible print; RBLX -17% on weaker bookings guide; TWLO -19% on first decel in several quarters.
Couple in fears around midterms and Iran (Oil +2% after tanker attacks and renewed Houthi strikes), some BTC hacking news, and you have an ugly situation for a Friday. Semis -6% early while Software -50bps holding in the best. Plenty of semi names down 7-10%. DELL/HPQ/AMD -10% in sympathy with the INTC PC driven guide.
Asia mixed overnight: TPX -0.95%, NKY -2.12%, Hang Seng +1.46%, HSCEI +1.37%, SHCOMP -1.44%, Shenzhen -2.65%, Taiwan TAIEX -2.49%, Korea KOSPI -3.48%
Ugly start all around. We’ll cover AMZN, INTC, SNDK, TWLO Earnings first then onto the usual. We’ll have the RBLX and RDDT recaps in Slack as we get through them.
Let’s get to it…
AMZN -7%: AWS +39% beat Street but missed the ~43% bogey (smallest beat since Q2’25), and the new “north of 40%” for 2027-28 above street but already where below buyside is
Overall, not the clean print longs wanted (still a very crowded long) but also not the worst of the night. AWS accelerated for a sixth straight quarter, but the q/q dollar add slowed to $3.75B from a record $4.6B, and mgmt gave no 4Q AWS or margin color. The new multi-year frame (AWS “north of 40%” in each of 2027 and 2028, a $1T AWS in five to 10 years) pulls sell-side numbers up:
but it sits below the mid-40s to low-50s FY27 AWS many on the buyside already model. Most bulls were happy to get the number as shows Jassy and co being more shareholder friendly while others questioned the timing. The Q4 AWS buyside expectation comes down to low 40s from highs 40s.
Bulls focused on $578B of backlog (+$82B q/q, ~2.9x y/y), visibility into “some of 2029,” external Trainium sales from late 2027 and a record 13.9% OM; bulls will say ads (Prime Day timing, high-teens 4Q guide) and the 4Q OI guide (Leo capitalization slipping to 1Q27) are one time items that can be looked through. Bears will point to an unexplained slowdown in AWS adds, AI AWS margins below core, & “meaningfully more” 2027 capex on top of -$33.5B of 3Q FCF. Still feeling around, but buyside #s seem to be settling in around ~$12 in EPS for FY27, down slightly.
Details:
Revenue: $201.9B, +12.1% y/y, +13% ex-FX (last q +19.6% y/y) vs. Street $202.35B, +12.3%; buyside ~$202.5-203.5B
AWS: $46.0B, +39.3% y/y (last q +36.7%) vs. Street $45.45B, +37.7%; buyside ~43%
AWS OM: 38.7% vs. Street 37.3%; buyside ~40%
EBIT: $28.1B / 13.9% OM vs. Street $26.2B; buyside ~$27.5-28B
GAAP EPS: $1.89 vs. Street $1.97
4Q Revenue Guide: $240-247B, midpoint $243.5B, +14.1% y/y vs. Street $244.4B, +14.5%; buyside HE ~$247-248B
4Q EBIT Guide: $28.5-33.5B, midpoint $31.0B, +24% y/y vs. Street $32.9B; buyside HE ~$34-35B