Amazon's AI Business Passed a $25 Billion Run Rate. Where Does That Put the Stock in 5 Years?

Amazon Web Services' artificial intelligence business hit a $25 billion annual revenue run rate with triple-digit year-over-year growth, the company disclosed. AWS overall posted $42.2 billion in revenue last quarter, up 37%, while margins expanded.

The AI momentum underpins AMZN's current $2.8 trillion valuation, which trades at 28 times forward earnings. That multiple implies roughly 15% annual profit growth through 2031, a target that hinges on AWS sustaining margins as its AI segment scales.

The $25 billion AI run rate now represents more than half of AWS's total quarterly revenue base, signaling rapid adoption of machine learning infrastructure and generative AI services. The triple-digit growth rate suggests enterprise customers are accelerating cloud AI spending, though the company has not broken out specific AI margin profiles.

If AWS can deliver margin expansion while growing the AI business at current rates, the 15% annual profit growth embedded in today's valuation appears achievable. The risk: competitive pressure from Microsoft Azure and Google Cloud, or a slowdown in enterprise AI budgets.