Amazon.com, Inc. (AMZN) reported its fourth-quarter 2025 net sales of $213.4 billion, marking a 14% year-over-year increase and surpassing consensus estimates. The standout was Amazon Web Services (AWS), which grew 24% year-over-year to $35.6 billion, the fastest growth in over three years. Operating income rose to $25 billion, up from $21.2 billion in the previous year.
Despite the strong operational results, diluted earnings per share of $1.95 fell short of expectations, and free cash flow dropped sharply to $11.2 billion from $38.2 billion due to significant capital investments. For 2026, Amazon committed approximately $200 billion in capital expenditures, primarily for AWS AI infrastructure, and projected Q1 net sales between $173.5 billion and $178.5 billion, reflecting 11% to 15% growth year-over-year.
Over the past six months, Amazon shares have decreased by 7.2%, in contrast to declines in the Zacks Internet- Commerce industry and Retail-Wholesale sector by 12.9% and 4.6%, respectively. AWS, while holding a 28% market share, faces increasing competition from Microsoft and Alphabet, which hold 21% and 14% shares respectively.
