Amazon reported strong Q4 2025 results on Thursday, revealing a record revenue of $213.38 billion, a 14% increase year-over-year, surpassing estimates of $211.45 billion. Key segments such as cloud services (AWS) and advertising rose over 20%, with AWS revenue hitting $35.6 billion and advertising revenue reaching $21.32 billion. However, the company reported a slight earnings miss with an adjusted EPS of $1.95, falling short of expectations at $1.98.
In a significant strategic move, Amazon announced plans to boost its capital expenditures to $200 billion by 2026, a 53% increase from last year’s $131 billion. This announcement led to a 10% drop in stock price, marking a historic low forward P/E valuation of 28X. For Q1 2026, Amazon anticipates sales between $173.5 billion and $178.5 billion, reflecting a growth range of 11-15%.
Over the full year, Amazon’s annual sales exceeded $700 billion for the first time, totaling $716.92 billion, with a 12% growth. Adjusted EPS surged to $7.17 from $5.53 in 2024. CEO Andy Jassy emphasized the company’s ability to leverage AI for growth, asserting a return on invested capital (ROIC) of 16%, although still below the desired 20% benchmark.
