In the previous article "Global Cloud Giants Q3: AI Accelerates Revenue Growth, Margins Continue to Improve," it was noted that cloud giants see massive AI demand and continue to ramp AI investment. With Alibaba's delayed report, the Q4 scorecards for all five global cloud giants are in: all three global hyperscalers constrained by AI compute capacity, and all three guiding 2025 capex to grow further.
1
Amazon AWS
Global Cloud Leader
Q4 revenue $28.786B, up 19% year over year, growth rate flat sequentially, up 5% sequentially; operating income $10.632B, up 48% year over year, a new all-time high, operating margin 37%, up 7 percentage points year over year.
AWS Q4 revenue represented 15% of Amazon total revenue, contributing 50% of Amazon operating income.
Q4 AWS revenue run rate $115B, growing in both AI and non-AI; AI revenue run rate in the multi-billions, maintaining triple-digit year-over-year growth; revenue growth constrained by compute supply; H2 2025 compute supply truly begins to ease; Project Rainier with Anthropic, hundreds of thousands of Trainium2 chips; Trainium 3 launching late 2025; heavy AI spend because demand is massive, commitment $177B, up 14% year over year, average remaining life 4.1 years; from 24Q1 depreciation life extended to 6 years, contributing 2 percentage points of AWS margin expansion YoY this quarter; headcount optimization also lifted margins; but from Jan 2025, portion of server and network equipment useful life shortened from six to five years; early AI margins lower, but long-term AI margins eventually converge with non-AI; AWS margins will exhibit normal seasonality.
2
Microsoft Azure
Second-Largest Global Cloud
Microsoft Azure Q4 revenue $17.846B, up 31% year over year, growth leading the global big three; quarterly overall AI revenue run rate >$13B, primarily from Azure AI and M365 Copilot.
Azure's Intelligent Cloud (Server+Azure+Enterprise Services) operating income $10.851B, up 14% year over year, a new all-time high; operating margin 42%; Intelligent Cloud Q4 revenue 37% of Microsoft total, contributing 34% of operating income.
Azure non-AI growth below expectations, AI growth above expectations; AI contributed 13% ($1.8B) of Azure growth; compute supply constraints persist through mid-2025; Azure AI Foundry MAU >200k; Phi-family SLMs cumulative downloads >20M; Azure OpenAI apps running on Azure Database and App Service grew >2x YoY, driving significant adoption of SQL Hyperscale and Cosmos DB; Azure and M365 $100M+ deal growth driving commitment growth; Commercial RPO $298B, up 34% year over year.
3
Google Cloud
Third-Largest Global Cloud
Google Cloud Q4 revenue $11.955B, up 30% year over year, growth down 5 percentage points sequentially due to compute constraints; operating income $2.093B, operating margin 18%, a new all-time high.
Google Cloud five core businesses: AI infra, Vertex AI platform, BigQuery data platform, AI security, Workspace; GCP revenue growth significantly outpaced Cloud overall; 2024 Cloud AI-related revenue in the multi-billions; Cloud customer training+inference compute consumption 8x vs. 18 months ago; >4.4M developers using Gemini, 2x vs. 6 months ago; 2024 $250M+ Cloud deals count doubled YoY, first-time commitments doubled; 2024 Vertex AI customers up 5x YoY, usage up 20x YoY.
Management previously guided year-end YouTube+Cloud revenue run rate >$100B, implying Q4 Google Cloud ~$15B; actual was YouTube beat, Google Cloud only $12B; management cited compute constraints; 2025 Google Cloud growth depends on compute bring-up timing; previously noted the hope for 2024 Google Cloud margin to hit 20%; not achieved but Q4 reached 18%, margin uptrend intact.
4
Alibaba Cloud
China's Cloud Leader
Q4 revenue RMB 31.742B ($4.349B), up 13% year over year, first double-digit growth in 9 quarters; excluding internal consolidation, up 11% YoY; core public cloud (elastic compute, database, AI) continued double-digit growth; AI-related product adoption rising; AI-related revenue triple-digit YoY for 6 consecutive quarters; continuing to increase AI infrastructure investment; look forward to next quarter with DeepSeek tailwind.
Q4 EBITA profit RMB 3.138B, EBITA margin 10%, a new high, driven by high-margin public cloud including AI.
5
Oracle Cloud
Global Cloud Challenger
Q4 revenue $5.937B, up 24% year over year, growth up 3 percentage points sequentially; OCI (IaaS) revenue $2.4B, up 52% YoY; SaaS revenue $3.5B, up 10% YoY; this quarter's ad business exit impacted Cloud growth by 2 points; IaaS gross margin and operating income continue to climb; expect OCI to grow quarter over quarter; FY25 Oracle Cloud revenue >$25B, OCI revenue YoY +50%; FY25 capex doubling YoY.
OCI consumption revenue YoY +58%, GPU consumption revenue YoY +336%, growth constrained by compute; next two quarters compute supply improves quarterly; Cloud Database annualized revenue $2.2B YoY +28%, now live on Azure/GCP/AWS; RPO $97B YoY +50%, Cloud RPO YoY +80%, ~3/4 of total RPO; landed Meta deal this quarter, booked into next quarter RPO.
Oracle now has 162 cloud data centers globally, 98 live; largest live Supercluster >65,000 H200s; OCI differentiation: standardization, automation, data center coverage from small to large; future multi-cloud business could reach multi-billions.
6
DigitalOcean
AWS for Everyone
Q4 revenue $205M, up 13% YoY; ARR $820M, up 13% YoY, AI/ML ARR up ~160% YoY; gross margin 62%, up 3pp YoY; operating margin 16%; Monthly ARPU $105.75, up 14% YoY, sustained sequential growth; 2024 AI/ML contributed >3pp to revenue growth; guiding 25Q1 overall revenue up 13% YoY.
Q4 EBITDA profit $85.9M, up 17% YoY; EBITDA margin 42%; Net Dollar Retention Rate 99%, up 2pp sequentially but still below 100%; traditional cloud Net Dollar Retention Rate back above 100% for first time since 2023Q2.
DigitalOcean's clear trait: customers mainly SMBs (now 165k), highly sensitive to macro cycles; ARPU rising but customer growth slow. Previously noted in the AI cloud wave, facing upstarts like CoreWeave and Nebius, traditional small cloud DigitalOcean has been slow to act; only opened H100 instances to all customers Oct 1, launched first AI product GenAI Platform early Nov.
Conclusion
Cloud capex exploded again this quarter: FAMG Q4 capex up 77% YoY, fifth consecutive quarterly record, up 24% sequentially. As hyperscalers uniformly cite severe compute shortage, 2025 big-three capex grows sharply; cloud capex concentration on GPU servers will keep rising; market keeps calling it overinvestment; Amazon keeps saying this feels like the early days of cloud.
