Amazon’s fourth quarter was marked by strong revenue growth and ongoing investment in emerging areas, but the market responded negatively. Management attributed performance to acceleration in AWS, particularly AI and custom silicon, and continued gains in online retail, grocery delivery, and advertising. CEO Andrew Jassy emphasized, “We are seeing strong growth, and with the incremental opportunities available to us in areas like AI, chips, low earth orbit satellites, quick commerce, and serving more consumers’ everyday essentials needs, we have a chance to build an even more meaningful business.” Management also discussed the impact of special charges and incremental costs related to supply chain transformation and technology investments.
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Amazon (AMZN) Q4 CY2025 Highlights:
- Revenue: $213.4 billion vs analyst estimates of $211.6 billion (0.9% beat)
- Operating Profit (GAAP): $24.98 billion vs analyst estimates of $25.08 billion (small miss)
- EPS (GAAP): $1.95 vs analyst expectations of $1.96 (in line)
- North America Revenue: $127.1 billion vs analyst estimates of $127 billion (small beat)
- AWS Revenue: $35.58 billion vs analyst estimates of $34.85 billion (2.1% beat)
- North America Operating Profit: $11.47 billion vs analyst estimates of $10.83 billion (6% beat)
- AWS Operating Profit: $12.47 billion vs analyst estimates of $12.06 billion (3.3% beat)
- Operating Margin: 11.7%, in line with the same quarter last year
- Market Capitalization: $2.19 trillion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Amazon’s Q4 Earnings Call
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Mark Mahaney (Evercore ISI) asked about the long-term return on invested capital for AI and AWS infrastructure. CFO Brian T. Olsavsky explained that capital allocation is driven by immediate customer demand and backlog, emphasizing confidence in strong returns as capacity is rapidly monetized.
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Douglas Anmuth (JPMorgan) sought clarity on Project Rainier’s progress and financial guardrails for capital spending. CEO Andrew Jassy confirmed high customer interest in Tranium chips and indicated that aggressive investment will continue due to robust demand, while acknowledging the need for prudent free cash flow management.
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Ross Sandler (Barclays) questioned how Amazon’s AI partnerships, such as with OpenAI, might evolve and impact both retail and AWS. Jassy noted broadening enterprise AI adoption and expects thousands of companies to drive future demand, not just a few labs.
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Michael Morton (MoffettNathanson) inquired about the impact of AI-driven shopping assistants on retail and advertising. Jassy highlighted that Amazon’s Rufus assistant drives higher conversion and expects retailer-specific agents to become more influential in customer decision-making.
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Brian Thomas Nowak (Morgan Stanley) probed sources of efficiency within retail versus areas of ongoing investment. Jassy outlined ongoing network regionalization, robotics deployment, and box consolidation efforts as key drivers of future cost savings alongside continued investment in selection and delivery speed.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace at which AWS can add and monetize new AI and custom silicon capacity, (2) the impact of fulfillment network automation and regionalization on retail margins, and (3) progress in commercializing Amazon LEO satellite services. The trajectory of grocery and everyday essentials growth, as well as adoption rates for new AI-powered consumer features, will also be closely monitored.
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