Amazon Web Services just proved it's still the cloud king worth betting on. The unit pulled in $35.58 billion in Q4 revenue - blowing past the $34.93 billion Wall Street expected - while operating income hit $12.47 billion against an $11.91 billion consensus. But here's the real story: Amazon CEO Andy Jassy dropped a bombshell on the earnings call, announcing the company will burn through $200 billion in 2026 capital spending, mostly on AI infrastructure. That's $51 billion more than analysts saw coming.
Amazon Web Services just handed investors exactly what they needed after Amazon stock took a beating earlier this week. The cloud unit's Q4 performance shows the company's massive AI spending spree isn't just ambitious - it's already paying off.
The numbers tell a clear story. AWS generated $35.58 billion in revenue for the quarter, crushing the $34.93 billion StreetAccount consensus. That 24% growth rate represents about 17% of Amazon's total revenue, but here's the kicker: operating income of $12.47 billion accounts for most of the parent company's entire profit pool. The unit's operating margin even ticked up to 35% from 34.6% in Q3.
"Just for perspective, that's twice what we had in 2022, when we were an $80 billion annual run rate business," CEO Andy Jassy told analysts during Thursday's earnings call. "We expect to double it again by the end of '27." He was talking about the nearly 4 gigawatts of computing capacity AWS added in 2025 alone.
Then came the jaw-dropper: Amazon plans to spend $200 billion on capital expenditures in 2026, mainly in AWS. The figure sailed past Visible Alpha's $148.86 billion consensus by a staggering $51 billion. Jassy didn't flinch. "Some of it is for our core workloads, which are non-AI workloads, because they're growing at a faster rate than we anticipated," he explained. "But most of it is in AI, and we just have a lot of growth, a lot of demand."
