Amazon.com is set to release its fourth quarter (Q4) earnings report after the market closes on Thursday, February 5, 2026.
Here are consensus expectations from Tiger Trade for Amazon's Q4 earnings:
Revenue: $211.3 billion, up 12.51% YoY
EPS: $1.964, up 5.61% YoY
AWS revenue: $34.9 billion
Operating margin: 11.7% (+39 basis points YoY)
Previous Quarter Review
Amazon's AWS emerged as Q3 standout performer, with revenue accelerating 20% YoY to $33.0 billion, marking AWS's fastest expansion since 2022. The cloud division's $11.4 billion in operating income and robust $200 billion backlog underscore sustained enterprise demand for artificial intelligence (AI) workloads. Advertising revenue grew 24% to $17.7 billion, outpacing retail growth and reinforcing its position as a high-margin profit driver.
Amazon's cloud unit AWS reports 20% revenue rise in Q3, compared with estimates of a 17.95% increase
Revenue reaches $180.2 billion—a 13% YoY increase and operating income of $17.4 billion remained flat YoY, constrained by $4.3 billion in special charges
AWS typically accounts for a little more than 15% of Amazon's total revenue, but the segment is a huge profit engine, making up roughly 60% of the company's total operating income
Cloud companies see revenue boost as AI splurge holds up
The concerning metric was free cash flow, which plummeted 69% to just $14.8 billion on a trailing twelve-month basis, driven by a $50.9 billion YoY surge in capital expenditure (capex). This dramatic deterioration highlights the financial strain of Amazon's AI infrastructure buildout.
In November 2025, Amazon raised $15 billion by issuing bonds - this was the company's first issuance of US dollar bonds in three years - as the company increasingly relies on the bond market to raise funds for its artificial intelligence projects.
Operating Margin Expected to Deliver Double-Digit Growth in Q4
Analyst consensus reflects expectations for sustained momentum in the holiday quarter. It is expected that the operating profit margin will increase 11.7% YoY, as the growth rate of the high-profit business segments (Amazon Web Services and advertising business) will exceed that of the core retail business.
The Cloud Will Be the Center of Attention
Amazon Web Services (AWS) is the world's largest cloud computing platform. It's a place where businesses can access all the tools they need to thrive in the digital age, but it has also become a top destination for AI developers thanks to its state-of-the-art data centers and other services. Whilst AWS's 20% growth represents reacceleration, Microsoft Azure and Google Cloud are gaining ground at 40% and 34% respectively.
Investors will be trying to figure out whether Amazon Web Services (AWS) can maintain its sustained high growth rate, particularly given capacity constraints. The management's explanations regarding the competitive landscape, pricing strategies, and the timeline for converting the $200 billion order will be closely watched.
Capital Investment Growth and Cash Flow Outlook
In October, Amazon Chief Financial Officer Brian Olsavsky said he expected full-year capital expenditures to be around $125 billion, and higher next year, without providing details. The company booked $89.9 billion in capital expenditures through the first three quarters, largely on AI projects.
Due to the significant pressure on free cash flow, investors will closely examine whether Amazon can clearly articulate a feasible path for increasing cash output, or whether the company will increasingly rely on the debt market to finance its expansion.
AI Chip Adoption
Like most cloud providers, Amazon's data centers are filled with AI chips from top suppliers like Nvidia, and it rents the computing capacity to developers for a fee. However, the company also designed its own chips, called Trainium and Inferentia. The latest Trainium2 chips offer up to 40% better price performance than competing hardware when training AI models, which is why leading start-up Anthropic is using up to 1 million of them.
Investors require evidence of broader customer adoption beyond Anthropic to validate the substantial research and development investment.
Retail Could Be a Critical Value Driver for Amazon in Q4
Retail could be a critical value driver for Amazon in Q4’25 as consumer sentiment weakens with inflationary fears and a weakening jobs market. Despite the potential economic headwinds, consumers are expected to splurge on smaller luxuries or affordable treats over larger discretionary items, potentially driving value to Amazon’s online retail footprint. I believe the greatest value that Amazon brings is the ability to combat inflation with its private label brands, offering consumers some insulation to inflationary pressures while maintaining spending in Amazon’s retail ecosystem.
Wall Street Sentiment and Forecasts
The market sentiment among Wall Street analysts is generally optimistic. Among the 71 analysts' ratings, 67 are "strong buy" or "buy". The average target stock price has risen from $267 before the earnings announcement in the third quarter to $293, which represents a 20% upside from current levels.
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