Amazon’s cloud computing division just wrapped up its best quarter in over three years, showing that businesses are spending more than ever on cloud services.
Strong Financial Performance
In the final three months of 2025, Amazon Web Services (AWS) brought in $35.6 billion in revenue. This represents a 24% jump compared to the same period in 2024, making it the company’s strongest growth rate since late 2022.
For the entire year, AWS is now running at an annual revenue pace of $142 billion, according to Amazon’s earnings report.
The cloud division also became more profitable, with operating income climbing from $10.6 billion to $12.5 billion year-over-year.
What’s Driving the Growth?
Amazon CEO Andy Jassy pointed to several factors behind AWS’s success during the company’s earnings call:
New Customer Wins: AWS secured major deals with well-known companies including:
- Salesforce
- BlackRock
- Perplexity
- U.S. Air Force
Startup Dominance: More startups in the United States choose AWS as their main cloud provider than the next two competitors combined.
AI Boom: The explosion in artificial intelligence applications is creating massive demand for cloud computing power. Jassy explained that businesses want to run their AI projects on the same platform where their other data and applications already live.
Traditional Migration: Many companies are still moving their computer systems from physical servers to the cloud, creating steady demand for AWS services.
Massive Infrastructure Expansion
To keep up with demand, AWS added over one gigawatt of power capacity to its data center network in just the last quarter. The company is also adding “significant computing capacity each day,” according to Jassy.
Market Leadership Position
AWS remains the dominant player in the cloud computing market, controlling approximately 30% of the global cloud infrastructure market. This puts it well ahead of competitors:
- Microsoft Azure: 20% market share
- Google Cloud: 13% market share
Together, these three companies control more than 60% of the worldwide cloud market, which reached $99 billion in quarterly spending during mid-2025.
What Makes AWS Attractive?
According to Jassy, AWS offers what he calls a “top-to-bottom AI stack” – meaning customers can build complete AI solutions using AWS tools without needing to piece together services from multiple providers.
The company emphasizes that having 24% growth on a $142 billion business is more impressive than higher percentage growth on a smaller revenue base, which is the case with AWS’s competitors.
AWS’s Role in Amazon
The cloud business now represents 16.6% of Amazon’s total revenue, which hit $213.4 billion in the fourth quarter.
Despite AWS’s strong performance, Amazon’s stock fell 10% after the earnings announcement because the company plans to increase spending on new facilities and equipment, and overall earnings per share came in below what Wall Street analysts expected.
Why Cloud Computing Matters
Cloud computing allows businesses to rent computer power, storage, and software over the internet instead of buying and maintaining their own physical servers. This makes it easier and cheaper for companies to:
- Scale up or down based on demand
- Access powerful computing for AI and data analysis
- Launch new services quickly
- Only pay for what they use
As more companies embrace digital transformation and artificial intelligence, demand for cloud services continues to grow, making it one of the most important and profitable sectors in the technology industry.
Conclusion
The cloud computing market is expected to keep growing rapidly, with industry analysts projecting it could exceed $400 billion annually for the first time in 2025. AWS’s leadership position, combined with the ongoing shift to AI-powered applications, suggests the company will remain a major force in technology infrastructure for years to come.
The challenge for AWS will be maintaining its growth rate as the business gets larger, while also fending off intense competition from Microsoft and Google, who are both investing heavily in their own cloud platforms.