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AWS revenue continues to soar as cloud demand remains high

Amazon Web Services (AWS) reported a strong Q4 2025 with $35.6 billion in revenue, a 24% year-on-year increase, marking the highest growth rate in 13 quarters. Key drivers included new deals with major companies and government entities, alongside growth fueled by AI demand. Despite AWS's success, Amazon's shares fell 10% after missing earnings expectations.

Key points

  • AWS reported $35.6 billion in Q4 2025 revenue.
  • This is a 24% increase from the previous year.
  • AWS annual revenue run rate reached $142 billion.
  • Operating income rose from $10.6 billion in Q4 2024 to $12.5 billion in Q4 2025.
  • Growth was driven by agreements with Salesforce, BlackRock, and the U.S. Air Force.
  • AWS added over a gigawatt of power to its data centers in Q4 2025.
  • AWS accounted for 16.6% of Amazon's total revenue in Q4 2025.
  • Despite AWS growth, Amazon's shares fell 10% due to capital expenditure concerns.
  • Growth also attributed to a significant increase in AI workload handling.

Why it matters

  • Cloud adoption has surged significantly in businesses, reflecting a continuing trend into 2025.
  • The increasing reliance on cloud services aligns with growing hybrid work models post-COVID-19.
  • AWS's success signals a larger market trend where major players invest heavily in AI capabilities and cloud infrastructure.
  • The fall in Amazon's shares highlights investor scrutiny in an environment of rising capital expenditures.

AWS's record growth in Q4 2025 underscores its dominance in the cloud market, driven by AI and new partnerships. However, Amazon's stock decline illustrates the complexities investors face, balancing growth with rising costs.