AWS revenue hits $35.6 billion, but capex plans rattle investors

Amazon’s cloud computing division, Amazon Web Services (AWS), ended 2025 with its strongest quarterly growth rate in more than three years. On Thursday, the company reported that its cloud service business recorded $35.6 billion in revenue in the fourth quarter of 2025.

The division’s key financial metrics for the quarter include:

• Revenue: $35.6 billion, representing a 24% year-on-year increase. This marks the segment’s largest growth rate in 13 quarters.
• Annual run rate: $142 billion. The run rate represents an annualized revenue projection based on current performance.
• Operating income: Increased to $12.5 billion in the fourth quarter, up from $10.6 billion in the same period in 2024. Operating income is defined as the profit from core business operations.

Amazon CEO Andy Jassy attributed the performance to AWS’s scale and its ability to add capacity. He noted that growing 24% on a $142 billion annualized run rate is structurally different from competitors experiencing higher percentage growth on smaller bases, allowing AWS to add more incremental revenue and capacity than others. To support this expansion, AWS is adding core computing capacity daily. This growth was supported by agreements with partners including Salesforce, BlackRock, Perplexity, and the U.S. Air Force. Jassy emphasized the platform’s position among early-stage companies, stating, “More of the top 500 U.S. startups use AWS as their primary cloud provider than the next two providers combined.” He added that enterprise customers prefer to run artificial intelligence workloads where their existing applications and data reside, which in turn expands their core AWS footprint as they run large AI workloads on the platform.

Despite the strong performance of the cloud division, which made up 16.6% of Amazon’s overall $213.4 billion revenue in the fourth quarter, broader market reaction was negative. Amazon shares fell 10% in after-hours trading. Investors reacted to the company’s plans to boost capital expenditures—the funds used by a company to acquire, upgrade, and maintain physical assets. Additionally, the company missed Wall Street’s expectations on earnings per share, which represents a company’s profit divided by the outstanding shares of its common stock.

Why it matters

AWS remains a massive growth engine for Amazon, but the market is increasingly sensitive to the high capital costs required to maintain that lead in the AI era.