AWS Growth Slows for Third Straight Quarter

Amazon Web Services (AWS) reported slower-than-expected growth in Q1 2025, with revenue rising 17% year-over-year to $29.27 billion, just shy of analysts’ $29.42 billion forecast.

This marks the third consecutive quarter of missed expectations and a slowdown from the 18.9% growth seen in Q4. Despite this, AWS delivered a strong $11.55 billion in operating income, with a 39.5% margin—its highest since at least 2014.

Capital expenditures surged to $24.3 billion, up 74% year-over-year, with much directed at data centres for AI workloads. CEO Andy Jassy emphasised the role of custom chips like Trainium2 in lowering AI costs and expanding AWS capacity to support demand from clients like Anthropic.

While rivals Microsoft Azure beat forecasts and Google Cloud slightly missed, AWS remains the leading global cloud infrastructure provider.

The company continues investing heavily in AI, launching a new agentic AI group and video game streaming service during the quarter.

Recently, Amazon also unveiled Nova Premier, calling it the most advanced AI model in its Nova family to date.

Available through Amazon Bedrock—its platform for building and deploying AI models—Nova Premier can process text, images, and video (though not audio).