AWS enjoys strongest growth in over three years as AI drives cloud demand and plans record investment

AWS reports record-breaking quarterly and annual revenue, with a surge in profit, as its aggressive investment in AI and infrastructure prepares the ground for long-term growth amid fierce competition in the cloud sector.

Amazon Web Services closed 2025 with a surge in revenue and profit that underscored the central role cloud and AI are playing in the technology sector. AWS reported $35.6bn of revenue in the fourth quarter, a 24% increase year-on-year, while operating income for the period rose to $12.5bn. According to reporting by Computer Weekly and TechCrunch, the quarter represented the unit’s strongest growth rate in more than three years. Sources: ^[2],^[5]

For the full year AWS posted $128.7bn in revenue and saw profit climb to $45.6bn from $39.8bn the prior year, figures that contribute to an annualised run rate Amazon now puts at about $142bn. Industry accounts also note rapid expansion in AWS’s chips business, which has exceeded a $10bn annual revenue run rate and is growing at triple-digit percentages. Sources: ^[2],^[6]

Amazon chief executive Andy Jassy framed the results as the product of accelerated innovation and close attention to customer problems. “This growth is happening because we’re continuing to innovate at a rapid rate, and identify and knock down customer problems,” he said on the company’s earnings call. He told investors Amazon plans to step up capital spending sharply in 2026, targeting roughly $200bn to back businesses from AI and semiconductors to robotics and low-earth orbit satellites. Sources: ^[2],^[3]

The wider market backdrop helps explain why AWS’s gains matter. Analysts attribute much of the industry’s changing dynamics to generative AI driving demand for large-scale compute and specialised infrastructure. At the same time Google Cloud and Microsoft Azure are posting faster percentage growth from smaller bases; Alphabet’s cloud division delivered robust expansion last quarter, highlighting intensifying competition among the top providers. Sources: ^[6],^[4]

The scale of Amazon’s planned investment fed investor nervousness. Reporting from the Associated Press and market commentators recorded an after-hours share decline following the results, with some traders signalling concern about the near-term profitability impact of a near-60% jump in planned capital expenditure. Sources: ^[3],^[5]

AWS’s management argues the heavy investment will underpin longer-term returns by expanding capacity for AI workloads and other enterprise migrations from on-premises systems. The company points to continuing strength in traditional infrastructure services even as it races to broaden AI capabilities, positioning itself to capture both established IaaS demand and the newer, high‑growth AI market. Sources: ^[5],^[2]

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Source: Fuse Wire Services