Amazon.com Inc. (NASDAQ:AMZN) had a pretty good quarter by most measures. Wall Street noticed. The stock fell anyway.

Shares dropped about 2% Friday as investors weighed two competing stories: an AWS business accelerating at its fastest clip in years, and a capital spending bill so large it has turned free cash flow negative. The decline came amid a broader market sell-off, with the Nasdaq Composite tumbling 3.61% and the S&P 500 falling 1.80%.

Following Amazon's third-quarter results, analysts highlighted management's forecast for AWS growth above 40% in both 2027 and 2028. Several of them still lowered their stock price forecasts, citing concerns about capital spending, retail softness and valuation.

Amazon reiterated its 2026 capital spending forecast of about $220 billion and signaled even higher investment in 2027 as it races to expand AI infrastructure.

While AWS revenue surged 39.3% and its backlog reached $578 billion, trailing 12-month free cash flow fell to negative $42.4 billion. That raises the obvious question: how quickly does all this spending turn into stronger cash generation and shareholder returns?

Analysts Raise AWS and 2027 Forecasts

Bank of America Securities analyst Justin Post maintained a Buy rating but cut his price forecast to $317 from $320. Post raised his 2027 revenue estimate to $968 billion from $961 billion, operating profit to $145 billion from $140 billion and GAAP EPS to $10.60 from $10.24. He also lifted 2027 capex to $310 billion from $302 billion and raised 2028 EPS to $13.55 from $12.81.

KeyBanc analyst Justin Patterson maintained an Overweight rating and lowered his forecast to $345 from $350. Patterson raised 2027 and 2028 revenue forecasts by 1% and 3%, respectively, and EPS estimates by 5% and 8%. His 2027 revenue estimate increased to $970.74 billion, while EPS rose to $11.58 from $11.02.

Cantor Fitzgerald analyst Deepak Mathivanan reiterated Overweight and cut his forecast to $280 from $310. He raised 2027 revenue and operating-income estimates by 1% and 4%, respectively, citing AWS capacity additions, Bedrock growth and expanding demand for Graviton and Trainium.

Rosenblatt analyst Scott Devitt kept a Buy rating and $360 price forecast. He expects 2027 revenue of $968.49 billion, operating income of $148.3 billion and GAAP EPS of $10.71. Devitt raised 2027 and 2028 capex estimates to about $304 billion and $364 billion, respectively, while increasing 2028 EPS to $14.78.

AWS Growth Dominates the Bull Case

Guggenheim analyst Simeon Siegel maintained a Buy rating and $320 forecast, highlighting AWS growth of 39.3%, its strongest pace in 19 quarters, alongside record consolidated operating margins. He said management's expectation for AWS growth above 40% in both 2027 and 2028 reinforced the long-term thesis.

Yorkville Ives analyst Dan Ives reiterated Outperform and a $300 forecast, arguing that Amazon's elevated AI infrastructure spending is necessary while enterprise demand exceeds available capacity. He highlighted the $578 billion backlog, triple-digit AI revenue growth and management's view that AWS could eventually become a $1 trillion revenue business.

More Cautious Views Focus on Retail and Valuation

Citizens analyst Andrew Boone maintained Market Outperform but lowered his forecast to $275 from $315. Boone values Amazon at roughly 26 times his 2027 GAAP EPS estimate of $10.58 and said AWS, logistics and grocery remain key strengths despite free cash flow falling to a $42.4 billion outflow.

D.A. Davidson analyst Gil Luria remained the most cautious, maintaining a Neutral rating and $250 forecast, based on 27 times calendar 2027 EPS. Luria said AWS acceleration remains encouraging, but elevated expectations, slower retail growth and uncertainty around agentic commerce justify a more balanced stance.

Across the group, analysts broadly agreed that Amazon's near-term debate centers on whether massive AI-related capex can translate into sustained AWS growth, margin expansion and stronger free cash flow over the next several years.

AMZN Stock Price Activity: Amazon.com shares were down 2.19% at $238.46 at the time of publication on Friday, according to market data.