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Amazon beat the analyst estimates cited by The Associated Press for first-quarter 2026 sales, earnings per share, and AWS revenue. Its second-quarter sales forecast also exceeded the FactSet estimate AP reported, so the post-earnings share move was not a simple reaction to a revenue-guidance miss. Amazon’s April 29, 2026 results instead put strong operating growth alongside heavy AI-related investment and a sharp drop in trailing-year free cash flow.
What Amazon reported for Q1 2026
Amazon’s first quarter ended March 31, 2026; the company released results on April 29. Net sales were $181.5 billion, up 17% from $155.7 billion a year earlier. Excluding a favorable $2.9 billion foreign-exchange effect, sales growth was 15%. Operating income rose to $23.9 billion from $18.4 billion.
Net income was $30.3 billion, or $2.78 per diluted share, compared with $17.1 billion, or $1.59 per share, in Q1 2025. The current-quarter net income included a $16.8 billion pre-tax non-operating gain related to Amazon’s investment in Anthropic. That gain is distinct from operating income and materially contributed to reported net income.
Results versus estimates cited by AP
The Associated Press reported analyst estimates surveyed by FactSet. These are specific attributed comparisons, not a claim about every analyst’s forecast.
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| Measure | Q1 2026 reported | Estimate reported by AP |
|---|---|---|
| Diluted earnings per share | $2.78 | $1.63 |
| Net sales | $181.5 billion | $177.28 billion |
| AWS revenue | $37.58 billion | $36.6 billion |
Amazon Web Services revenue grew 28% year over year to about $37.6 billion, its fastest growth in 15 quarters, according to AP. AWS operating income was $14.2 billion. Amazon’s Q1 results release provides the company’s reported figures.
Was Amazon’s Q2 sales guidance actually soft?
Not against the FactSet comparison AP reported. Amazon forecast Q2 net sales of $194 billion to $199 billion, representing year-over-year growth of 16% to 19%. AP reported a FactSet analyst estimate of $188.96 billion, below the bottom of Amazon’s range. The sales guidance therefore exceeded that cited estimate rather than missing it.
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Amazon forecast Q2 operating income of $20 billion to $24 billion, compared with $19.2 billion in Q2 2025. The company said the outlook assumed Prime Day would take place in Q2 and warned that its forward-looking statement was subject to substantial uncertainty. Guidance figures are not results: actual sales and operating income could differ. See Amazon’s April 29, 2026 release for the full outlook.
Calling the guidance “soft” requires a qualification: the available sales comparison does not support saying Amazon forecast less revenue than analysts expected. Investors may have weighed other measures, including profitability, capital needs, cash generation, and the returns expected from large investments. Those are plausible areas of scrutiny, not a proven explanation for the stock’s movement.
Why free cash flow fell despite higher operating cash flow
For the 12 months through March 31, operating cash flow rose 30% to $148.5 billion. Over the same trailing-12-month period, free cash flow fell to $1.2 billion. These measures are not interchangeable: free cash flow accounts for capital investment that operating cash flow does not deduct in the same way.
Amazon attributed the free-cash-flow decline primarily to a $59.3 billion year-over-year increase in net purchases of property and equipment, which it connected to AI investment. The figures describe a trailing-year period, not cash flow for Q1 alone. They show how spending on infrastructure can absorb cash even while cash generated from operations increases.
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What happened to Amazon shares after the report?
AP reported that Amazon shares initially fell nearly 2% after hours and later rose about 3%. That is an after-hours snapshot, not a verified next-session closing performance. The reported price path moved in both directions, and the available reporting does not establish that guidance alone caused it.
AP said investors were watching Amazon’s prospective $200 billion 2026 investment in AI, robots, semiconductors, and satellites, a spending plan that had previously unsettled investors. The company’s reported increase in property-and-equipment purchases and decline in trailing-year free cash flow help explain why investment intensity could be part of the discussion. Neither fact proves what caused the immediate share reaction.
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How to read the earnings beat
- Operating performance was strong: sales and operating income increased, and AWS posted 28% year-over-year revenue growth.
- The earnings beat included an investment-related gain: the $16.8 billion pre-tax Anthropic gain was non-operating, so it should not be treated as recurring operating profit.
- The sales outlook beat the cited comparison: Amazon’s Q2 range was above the FactSet estimate AP reported, though that does not settle how investors assessed the outlook overall.
- Investment is the key cash-flow tension: higher operating cash flow coexisted with very low trailing-year free cash flow as property-and-equipment spending rose.
- The market reaction is not a verdict on one metric: the after-hours decline reversed into a rise, and the sources do not identify a single cause.
Amazon’s release also listed risks that could affect future results, including foreign exchange, energy prices, geopolitical and macroeconomic conditions, tariffs and trade policy, supply volatility such as memory chips, customer spending, inflation, and interest rates. These are disclosed uncertainties, not evidence that any one of them drove Q1 results or the share move.
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