Amazon Web Services revenue grew at its fastest pace in more than three years, up 24% to $35.6 billion in the fourth quarter, in a sign that demand for artificial intelligence and custom silicon is boosting corporate spending on the cloud.
The company disclosed revenue for its in-house data center chips for the first time, saying its Trainium and Graviton processors have a combined annual run rate of more than $10 billion.
But the revenue milestones are coming at a big cost. In the earnings release, Amazon CEO Andy Jassy signaled plans to spend a record $200 billion in capital expenditures across Amazon in 2026, citing “seminal opportunities like AI, chips, robotics, and low earth orbit satellites.”
Most of the capital spending is on AWS, Jassy said on the earnings conference call, seeking to assure investors that Amazon is “monetizing capacity as fast as we can install it.”
He pushed back on skepticism about the spending, saying “this isn’t some sort of quixotic top-line grab,” and compared the AI investment cycle to the early days of the AWS cloud business.
The projection adds to a wave of record-setting AI infrastructure plans from tech giants.
- Google parent Alphabet said Wednesday it expects 2026 capital expenditures of $175 billion to $185 billion, roughly double its 2025 spending.
- Microsoft reported spending of $37.5 billion in its most recent quarter alone, which contributed to a major decline in its shares.
- Meta expects to spend between $115 billion and $135 billion.
For the full year, Amazon generated $139.5 billion in cash from its operations in 2025, up 20%. But after accounting for the massive infrastructure buildout, the company was left with $11.2 billion in free cash flow, down from $38.2 billion a year earlier.
That means Amazon is making more money than ever, but plowing nearly all of it back into building out AI capacity, leaving little cash left over for shareholders.
Amazon shares fell 10% after-hours following the earnings report. In addition to the outsized capex projection, the company’s profits of $1.95/share just missed Wall Street’s expectations.
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