Amazon Web Services (AWS) concluded 2025 with its most robust quarterly growth rate in over three years, showcasing a significant surge in its cloud services business. The company announced its fourth-quarter 2025 revenue reached an impressive $35.6 billion, marking a 24% year-over-year increase. This performance represents AWS's strongest growth rate in 13 quarters, with its annual revenue run rate now standing at $142 billion, according to Amazon's official news release.
The cloud giant also saw a healthy boost in its operating income, climbing to $12.5 billion in Q4 2025, up from $10.6 billion in the same period of 2024. This growth underscores AWS's dominant position in the competitive cloud market, a point emphasized by Amazon CEO Andy Jassy during the company's fourth-quarter earnings call.
"It's very different having 24% year-over-year growth on a $142 billion annualized run rate than to have a higher percentage growth on a meaningfully smaller base, which is the case with our competitors," Jassy stated. "We continue to add more incremental revenue and capacity than others, and extend our leadership position."
Several strategic agreements fueled this strong fourth-quarter expansion. AWS secured new deals with major players like Salesforce, BlackRock, and Perplexity, alongside significant government entities such as the U.S. Air Force. Jassy highlighted AWS's continued appeal to startups, noting that "More of the top 500 U.S. startups use AWS as their primary cloud provider than the next two providers combined." The company also significantly expanded its infrastructure, adding over a gigawatt of power to its data center network during the quarter.
AI Drives Cloud Adoption and Expansion
The artificial intelligence (AI) boom is proving to be a substantial catalyst for AWS's growth. Jassy attributed much of this momentum to AWS's comprehensive, "top-to-bottom AI stack functionality." Beyond new AI-centric workloads, AWS continues to benefit from enterprises migrating their infrastructure from on-premise solutions to the cloud.
"We consistently see customers wanting to run their AI workloads where the rest of their applications and data are," Jassy explained. "We're also seeing that as customers run large AI workloads on AWS, they're adding to their core AWS footprint as well." This indicates that AI adoption not only brings new business but also deepens existing customer relationships and expands their overall cloud usage.
Despite AWS's stellar performance, which accounted for 16.6% of Amazon's overall $213.4 billion revenue in the fourth quarter, Amazon shares experienced a 10% decline in after-hours trading. This investor reaction was primarily due to the company's plans to increase capital expenditures and a miss on Wall Street's earnings per share expectations, overshadowing the cloud division's strong results.
