McIlroy triumphed by two shots, finishing at 21 under after carding a six-under 66 in Sunday's final round at the iconic course in California.
Davis finished tied for fifth at 17 under after shooting 69.
Fellow Australians Jason Day (12 under) tied for 13th, Min Woo Lee (11 under) tied for 17th and Adam Scott fired a stellar last round of 64 to finish tied for 22nd at 10 under.
Australia's Cam Davis tied for fifth at Pebble Beach, finishing four shots behind Rory McIlroy. (AP PHOTO)
The Australians were among a field unable to catch McIlroy, who broke clear to win his 27th PGA Tour title in grand style.
McIlroy followed his superb 65 on Saturday with a final round laced with an eagle, five birdies and a sole bogey.
The 35-year-old held a two-shot lead from Davis and others after 13 holes but then doubled that advantage with a sensational eagle at the par-5 14th.
McIlroy launched a booming 310 metre drive, used a 7-iron for his approach shot, and sank an eight-metre putt.
The former world No.1 gained further breathing space with a birdie on the next hole to be five-under in a six-hole stretch which effectively secured victory.
Northern Ireland's McIlroy won from Ireland's Shane Lowry (68) with American Lucas Glover (67) and England's Justin Rose (68) joint third at 18 under.
Davis hovered within touch of the leaders for much of his round but couldn't gain serious traction despite birdies at the 4th and 14th holes.
The Sydney-born 29-year-old ended his tournament with an incredible birdie on the 18th when he chipped from tree roots to within tap-in distance.
UNREAL shot by — PGA TOUR (@PGATOUR) @CamDavisGolf from the Cypress tree on 18! Do NOT try this at home. pic.twitter.com/NkJS4kLdkdFebruary 2, 2025
Day endured a topsy-turvy final round of three under: he holed a bunker shot for eagle on the 14th and made three birdies but any outside chance he had disappeared on the front nine with three bogeys, including consecutive blemishes on the 4th and 5th holes.
Lee logged two bogeys in his three-under final round while Scott produced a belated finish by firing eight birdies in his bogey-free round.
Scott, playing the back nine first, carded five birdies from his initial six holes.
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