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Amazon Web Services closed 2025 with a surge in momentum, delivering its strongest quarterly growth rate in more than three years. The performance underscored AWS ability to scale at massive size, even as cloud competition intensifies and investors focus closely on capital spending. Good to Know AWS revenue rose 24 percent year on year in the fourth quarter Annual revenue run rate reached $142 billion Operating income climbed despite heavy investment Amazon Web Services reported fourth quarter revenue of $35.6 billion, up 24 percent from the same period a year earlier. The result marked the fastest growth rate for the business in 13 quarters. Amazon said AWS now operates at a $142 billion annual revenue run rate. Operating income for the cloud unit increased to $12.5 billion in the quarter, compared with $10.6 billion in the fourth quarter of 2024. AWS accounted for 16.6 percent of Amazon total revenue of $213.4 billion during the period. Chief executive Andy Jassy emphasized the scale behind the growth during the earnings call. He said: “It’s very different having 24% year-over-year growth on $142 billion annualized run rate than to have a higher percentage growth on a meaningfully smaller base, which is the case with our competitors.” Enterprise Deals, AI Demand, and Investor Reaction AWS growth in the quarter was driven by new and expanded agreements with companies and institutions including Salesforce, BlackRock, Perplexity, and the United States Air Force. Jassy said AWS continues to dominate among early stage companies, noting that more of the top 500 U.S. startups rely on AWS as their primary cloud provider than on the next two providers combined. He also said AWS added more than a gigawatt of power capacity to its data center network during the fourth quarter, highlighting the pace of infrastructure expansion. While artificial intelligence remains a major growth driver, AWS is still seeing steady demand from enterprises migrating systems from on premise infrastructure to the cloud. Jassy said AI workloads often deepen customer relationships rather than standing alone. He said: “We consistently see customers wanting to run their AI workloads where the rest of their applications and data are. “We’re also seeing that as customers run large AI workloads on AWS, they’re adding to their core AWS footprint as well.” Despite the strong AWS performance, investor reaction was muted. Amazon shares fell about 10 percent in after hours trading after the company outlined plans to increase capital expenditures and missed Wall Street expectations on earnings per share.

Amazon Web Services

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