Amazon Q4 2025 Earnings: Revenue Up as AI Spending Weighs on Stock

Amazon reported solid fourth-quarter 2025 financial results on February 5, 2026, with revenue rising and its cloud division posting one of its fastest growth rates in years but aggressive capital spending plans for 2026 spooked investors and sent shares sharply lower.

The company announced net sales of $213.4 billion for Q4, up 14 % from $187.8 billion in the fourth quarter of 2024. Excluding the impact of foreign exchange changes, net sales rose about 12 % year-over-year. The results exceeded consensus forecasts for revenue but came with a mixed message on earnings and future spending. 

Amazon reported net income of $21.2 billion, or $1.95 per diluted share, up from $20.0 billion, or $1.86 per share, in the year-ago period. The earnings per share figure was just below the Wall Street expectation of around $1.96–$1.98, according to financial data. 

Amazon’s cloud business, Amazon Web Services (AWS), continued to be a major growth engine. AWS generated $35.6 billion in revenue, representing 24 % year-over-year growth, the fastest pace in more than a year and a half as demand for cloud computing and AI services remained strong. Operating income for AWS rose to approximately $12.5 billion, up from $10.6 billion in the same period last year.

CEO Andy Jassy highlighted the strength of AWS and its expanding customer base, but also used the earnings call to outline plans for even larger infrastructure investment in 2026, especially around AI computing capacity and specialized chip development. 

Overall revenue for Q4 beat market estimates, reinforcing Amazon’s ability to grow both its core retail business and cloud services. North America segment sales rose 10 % to $127.1 billion, while international net sales increased 17 %. AWS accounted for roughly 24 % of total company revenue, showing its continued significance in Amazon’s overall business mix. 

Despite the solid topline performance, Amazon’s stock slipped sharply after hours as investors reacted to the company’s ultra-aggressive $200 billion capital expenditure forecast for 2026. The guidance far exceeded analyst expectations and raised concerns about potential pressure on profitability later in the year. 

For the full year, Amazon reported net sales of $716.9 billion, up 12 % from $638.0 billion in 2024, driven by strength across retail, AWS, and advertising units. Full-year operating income increased to $80.0 billion, compared with $68.6 billion in 2024, while net income climbed to $77.7 billion. 

Amazon also noted that its free cash flow declined sharply during the 12 months ended December 31, 2025, due in large part to elevated spending on property, equipment, and AI-related infrastructure. 

Looking ahead to 2026, Amazon provided guidance for the first quarter, forecasting net sales between $173.5 billion and $178.5 billion and operating income between $16.5 billion and $21.5 billion. The company said it expects capital expenditure to reach about $200 billion over the full year, emphasizing investments in cloud capacity, AI chips, robotics, and next-generation fulfilment technologies.

While revenue and AWS growth demonstrated Amazon’s resilience, investors remain focused on spending plans. The planned $200 billion capex outlook roughly 50 % above 2025 levels rattled markets, with shares sliding significantly in pre-market and after-hours trading as traders weighed short-term profit dilution against long-term growth potential. 

Amazon’s ad business also showed strong performance, with ad revenue growing over 20%, underscoring the company’s role as a major digital advertising platform. 

Analysts say that while AWS remains a crown jewel for profitability, competition from rivals like Microsoft Azure and Google Cloud which have posted faster cloud growth rates puts pressure on Amazon to innovate and scale efficiently. The company’s plans for custom AI chips and expanded data centres are seen as key components of its strategy to stay competitive in the fast-evolving cloud and AI landscape.