Amazon Web Services concluded 2025 with its strongest quarterly growth rate in over three years. The company reported on Thursday that its cloud service business generated $35.6 billion in revenue during the fourth quarter of 2025. This figure represents a 24% year-over-year increase, marking the business segment’s largest growth rate in 13 quarters. According to Amazon, the annual revenue run rate for the segment now stands at $142 billion. The cloud service also experienced a rise in operating income, reaching $12.5 billion in the fourth quarter compared to $10.6 billion in the same period of 2024.
Amazon CEO Andy Jassy highlighted the significance of this growth during the company’s fourth-quarter earnings call. He stated that achieving 24% growth on a $142 billion annualized run rate is fundamentally different from higher percentage growth on a much smaller base, which is the case with competitors. Jassy emphasized that AWS continues to add more incremental revenue and capacity than others, thereby extending its market leadership.
This fourth-quarter growth was driven by new agreements with notable clients including Salesforce, BlackRock, Perplexity, and the U.S. Air Force, among other companies and government entities. Jassy also noted that more of the top 500 U.S. startups use AWS as their primary cloud provider than the next two providers combined. He added that the company is adding significant core computing capacity each day and expanded its data center network by over a gigawatt of power in the quarter.
Jassy explained that a substantial portion of AWS business continues to come from enterprises migrating their infrastructure from on-premise to the cloud. Additionally, AWS is benefiting from the artificial intelligence boom. Jassy credited the company’s comprehensive, top-to-bottom AI stack functionality for this advantage. He observed that customers prefer to run their AI workloads where their other applications and data reside, and that running large AI workloads on AWS often leads customers to expand their core AWS footprint as well.
AWS accounted for 16.6% of Amazon’s total fourth-quarter revenue, which was $213.4 billion. Despite this success, AWS performance was not enough to satisfy Amazon investors. The company’s shares fell 10% in after-hours trading. This decline followed investor reaction to Amazon’s plans to increase capital expenditures and its failure to meet Wall Street’s expectations for earnings per share.