Amazon Expects to Invest $200bn on AI in 2026

Amazon.com, Inc. today announced financial results for its fourth quarter ended December 31, 2025.

Fourth Quarter 2025

• Net sales increased 14% to $213.4 billion in the fourth quarter, compared with $187.8 billion in fourth quarter 2024. Excluding the $2.8 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 12% compared with fourth quarter 2024.
  
  
  • North America segment sales increased 10% year-over-year to $127.1 billion.
    
    
  • International segment sales increased 17% year-over-year to $50.7 billion, or increased 11% excluding changes in foreign exchange rates.
    
    
  • AWS segment sales increased 24% year-over-year to $35.6 billion.
    
    
• Operating income increased to $25.0 billion in the fourth quarter, compared with $21.2 billion in fourth quarter 2024. Fourth quarter 2025 operating income includes three special charges—$1.1 billion for the resolution of tax disputes associated with our stores business in Italy, and the settlement of a lawsuit, $730 million in estimated severance costs, and $610 million in asset impairments primarily related to physical stores. Without these charges, operating income would have been $27.4 billion.
  
  
  • North America segment operating income was $11.5 billion, compared with $9.3 billion in fourth quarter 2024.
    
    
  • International segment operating income was $1.0 billion, compared with $1.3 billion in fourth quarter 2024.
    
    
  • AWS segment operating income was $12.5 billion, compared with $10.6 billion in fourth quarter 2024.
    
    
• Net income increased to $21.2 billion in the fourth quarter, or $1.95 per diluted share, compared with $20.0 billion, or $1.86 per diluted share, in fourth quarter 2024.

Full Year 2025

• Net sales increased 12% to $716.9 billion in 2025, compared with $638.0 billion in 2024. Excluding the $4.4 billion favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 12% compared with 2024.
  
  
  • North America segment sales increased 10% year-over-year to $426.3 billion.
    
    
  • International segment sales increased 13% year-over-year to $161.9 billion, or increased 10% excluding changes in foreign exchange rates.
    
    
  • AWS segment sales increased 20% year-over-year to $128.7 billion.
    
    
• Operating income increased to $80.0 billion in 2025, compared with $68.6 billion in 2024.
  
  
  • North America segment operating income was $29.6 billion, compared with operating income of $25.0 billion in 2024.
    
    
  • International segment operating income was $4.7 billion, compared with an operating income of $3.8 billion in 2024.
    
    
  • AWS segment operating income was $45.6 billion, compared with operating income of $39.8 billion in 2024.
    
    
• Net income increased to $77.7 billion in 2025, or $7.17 per diluted share, compared with $59.2 billion, or $5.53 per diluted share, in 2024.
  
  
• Operating cash flow increased 20% to $139.5 billion for the trailing twelve months, compared with $115.9 billion for the trailing twelve months ended December 31, 2024.
  
  
• Free cash flow decreased to $11.2 billion for the trailing twelve months, driven primarily by a year-over-year increase of $50.7 billion in purchases of property and equipment, net of proceeds from sales and incentives. This increase primarily reflects investments in artificial intelligence. This compares to free cash flow of $38.2 billion for the trailing twelve months ended December 31, 2024.

“AWS growing 24% (our fastest growth in 13 quarters), Advertising growing 22%, Stores growing briskly across North America and International, our chips business growing triple digit percentages year-over-year—this growth is happening because we’re continuing to innovate at a rapid rate, and identify and knock down customer problems,” said Andy Jassy, President and CEO, Amazon. “With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital.”

Some other highlights since the company’s last earnings announcement include that Amazon:

• Announced new AWS agreements with OpenAI, Visa, the NBA, BlackRock, Perplexity, Lyft, United Airlines, DoorDash, Salesforce, U.S. Air Force, Adobe, Thomson Reuters, AT&T, S&P Global, National Bank of Canada, London Stock Exchange Group, Choice Hotels, Accenture, Indeed, HSBC, CrowdStrike, and more.
  
  
• Continued gaining significant momentum with AWS custom chips:
  
  
  • Trainium and Graviton now have a combined annual revenue run rate of over $10 billion and growing at a triple digit percentage year-over-year.
    
    
  • Trainium2 is fully subscribed with 1.4 million chips landed, and powers the majority of inference on Bedrock, a service used by 100,000+ companies.
    
    
  • Trainium2 powers Project Rainier, the world’s largest operational AI compute cluster with 500,000+ Trainium2 chips, which Anthropic is using to train its industry-leading AI model, Claude.
    
    
  • Trainium3 is now delivering production workloads and seeing strong demand, with nearly all Trainium3 supply of chips expected to be committed by mid-2026.
    
    
  • Trainium4 is expected to start delivering in 2027, with 6 times the FP4 compute performance, 4 times more memory bandwidth, and 2 times more high memory bandwidth capacity than Trainium3.
    
    
  • Introduced Graviton5, AWS’s most powerful and advanced CPU for a broad set of cloud workloads. Used by over 90% of the top 1,000 AWS customers, Graviton is up to 40% more price-performant than leading x86 processors, and enables applications to run faster, reduce costs, and meet sustainability goals.
    
    
• Added 20+ fully-managed models on Amazon Bedrock, including from Amazon Nova as well as Anthropic, Google, OpenAI, NVIDIA, Qwen, Mistral AI, Stability AI, Cohere, MiniMax AI, and Moonshot AI—enabling customers to test and switch between models without rewriting code while accessing breakthrough capabilities in coding, reasoning, and agentic workflows.
  
  
• Expanded its family of Nova models, including Nova 2 Lite and Nova 2 Pro for frontier intelligence with lower costs and latency, and Nova 2 Sonic for multilingual conversational AI.
  
  
• Introduced Nova Forge, a first-of-its-kind service that empowers organizations to build their own optimized variants of Nova by pre-training the model with their own proprietary data early in the process.
  
  
• Introduced Nova Act for building and managing reliable AI agents for UI-based workflows.
  
  
• Introduced new capabilities for Amazon Bedrock AgentCore, AWS’s pioneering set of infrastructure building blocks for developers and companies to build secure, scalable agents, including:
  
  
  • AgentCore Policy to help block unauthorized agent actions that operate outside the agent code and check agent actions against policies in milliseconds.
    
    
  • AgentCore Evaluations to trigger immediate alerts if a customer service agent’s satisfaction scores drop rapidly, helping enable swift response.
    
    
  • AgentCore Memory to help agents learn from experiences and improve decision-making, reducing processing time and the need for extensive custom instructions.
    
    
• Launched a new class of AI agents, called frontier agents, to solve tasks more autonomously and over longer durations, including:
  
  
  • Kiro agent that can autonomously handle a range of tasks—from triaging bugs to improving code coverage. Customers can ask it questions, describe a task, and assign tasks in their backlog, and the agent will independently figure it out and get the work done.
    
    
  • AWS Security Agent that embeds deep security expertise throughout the development lifecycle, proactively reviewing design documents and scanning pull requests against organizational security requirements and common vulnerabilities. It also transforms penetration testing from a slow, manual process into an on-demand capability, matching the team’s development velocity.
    
    
  • AWS DevOps Agent that helps resolve and proactively prevent incidents.
    
    
• Announced new agentic capabilities in AWS Transform to accelerate organization-wide code and application modernization across any code, API, framework, runtime, architecture, language, and even company-specific programming languages and frameworks. AWS Transform has also helped customers analyze 1.8 billion lines of mainframe code since launch.
  
  
• Launched new agentic AI capabilities for Amazon Connect—an AI tool that enables contact centers to provide consistent, personalized customer experiences—including advanced speech models, agentic assistance, AI-powered recommendations, and AI agent observability. Connect is a $1 billion annualized revenue run rate business growing over 30%, and has an average of 20 million+ interactions happening on it each day.
  
  
• Introduced AWS AI Factories to transform customers’ existing data centers into high-performance AI environments, which accelerates AI buildouts by months or years compared to building independently.
  
  
• Delivered at fastest speeds ever for Prime members globally in 2025.
  
  
• Continued increasing speed for rural customers in the U.S., with the average number of monthly customers receiving same-day delivery in rural areas nearly doubling year-over-year.
  
  
• Delivered nearly 70% more items same day in the U.S. than the year before, with Same-Day Delivery used by nearly 100 million customers.
  
  
• Expanded Amazon Now ultra-fast delivery, which offers delivery on thousands of items in 30 minutes or less. Amazon Now is now available in various cities in India, Mexico, and the UAE, and is being tested in several communities in the U.S. and UK.
  
  
• Expanded Same-Day grocery delivery to 2,300+ cities and towns across the U.S., making fresh groceries more accessible and transforming how customers shop for food, with perishables making up 9 of the top 10 most-ordered items in areas where the service is available.
  
  
• Expanded Amazon Pharmacy Same-Day Delivery, with same-day delivery of prescriptions now available in 3,000+ U.S. cities and towns.
  
  
• Made Rufus—Amazon’s agentic AI shopping assistant—smarter, more capable, and more helpful. Rufus can shop tens of millions of items in other online stores directly and make purchases on behalf of customers using its agentic Buy For Me feature. Rufus was used by 300 million+ customers and saw an even stronger response than anticipated, helping deliver nearly $12 billion in incremental annualized sales last year.
  
  
• Saw strong adoption of Lens—an AI tool that helps customers find products with a phone camera, screen shot, or bar code—with customers using it 45% more year-over-year.
  
  
• Was named the lowest-priced U.S. retailer by Profitero for the ninth year in a row, with online prices on average 14% lower than other major U.S. retailers.
  
  
• Increased selection on Amazon Haul in the U.S. to 1 million+ items under $10, with many under $5, and expanded to serve customers in 25+ countries and regions.
  
  
• Announced that Alexa+ is available to all customers in the U.S. for $19.99 per month as a standalone subscription, and free for Prime members. Customers without Prime can try the Alexa+ chat experience for free at Alexa.com.
  
  
• Added new capabilities to Alexa+, including answering a Ring doorbell, more ways to shop, and more ways to manage a home.
  
  
• Introduced new ways for customers to interact with Alexa+, including Alexa.com, a new mobile app, and third-party devices like Samsung TVs and BMW cars.
  
  
• Unveiled Leo Ultra, an enterprise-grade customer terminal for Amazon Leo and the fastest satellite internet antenna ever built, delivering simultaneous download speeds up to 1 Gbps and upload speeds up to 400 Mbps, powered by custom Leo silicon.
  
  
• Launched redesigned Kindle Scribe lineup with first-ever color Scribe. Lineup is thinner, lighter, and faster with new productivity features, including AI-powered notebook search.
  
  
• Rolled out Ring’s AI-powered Search Party for Dogs across the U.S. to help communities more quickly find and bring home lost dogs, already helping reunite more than one dog per day with their families.
  
  
• Ranked No. 3 on Fortune magazine’s World’s Most Admired Companies list, the tenth consecutive year in top three.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of February 5, 2026, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates and energy prices, changes in global economic and geopolitical conditions, tariff and trade policies, resource and supply volatility, including for memory chips, and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, and the various factors detailed below.

First Quarter 2026 Guidance

• Net sales are expected to be between $173.5 billion and $178.5 billion, or to grow between 11% and 15% compared with first quarter 2025. This guidance anticipates a favorable impact of approximately 180 basis points from foreign exchange rates.
  
  
• Operating income is expected to be between $16.5 billion and $21.5 billion, compared with $18.4 billion in first quarter 2025. This guidance includes approximately $1 billion of higher year-over-year Amazon Leo costs as we scale in 2026, as well as investment in quick commerce and even sharper prices in our international stores business.
  
  
• This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded.

Source : Amazon

Image : Kay Roxby /  shutterstock / 361433204

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