Amazon reported full-year net sales growth of 13% in 2025, reaching over $560 billion, with Q4 sales up 12% year-over-year despite a challenging consumer backdrop. E-commerce revenue rose by double digits across North America and international markets, driven by expanding Prime membership penetration and faster delivery commitments. In the holiday quarter alone, the company processed more than 1.5 billion items through its network of fulfillment centers, marking a 15% increase in shipped units versus the prior year.

Amazon Web Services (AWS) returned to a 20% year-over-year revenue growth rate in Q4, generating approximately $90 billion in annualized revenue. The segment’s operating margin expanded to 30%, benefitting from efficiency gains and growing demand for cloud-based AI workloads. Trainium2 AI chips, developed in-house, saw sequential revenue growth of 150% and are now contributing several billion dollars annually, underscoring AWS’s leadership in cost-effective AI infrastructure.

Amazon’s online advertising business grew 24% year-over-year to near $18 billion in revenue, now accounting for nearly 10% of total net sales. The high-margin ad segment helped lift consolidated operating income by 38% in Q4, pushing full-year operating margin above 5%. As ad spend shifts toward e-commerce platforms, Amazon is capturing share from traditional digital-ad providers, enhancing free cash flow generation.

Despite outpacing the S&P 500 by more than 60% over the past three years, Amazon trades at a forward P/E ratio near historical lows of the high-20s. Analysts project a compounded annual EPS growth rate of 20% through 2027, supported by robust AWS expansion and higher-margin advertising. With institutional ownership above 70% and several top firms raising price targets into the low-300s, the stock represents a compelling buying opportunity ahead of expected Q1 2026 earnings.