Amazon’s Stock Surge Tied to Major Partnerships
Amazon’s shares (NASDAQ: AMZN) have increased over 25% in the past 30 days, fueled by a significant multiyear deal with Meta Platforms (NASDAQ: META). Announced on Friday, this partnership involves Meta utilizing Amazon Web Services’ Graviton5 CPU chips to support its artificial intelligence workloads, marking a major expansion of their collaboration.
In addition, Amazon has strengthened ties with Anthropic, committing over $100 billion over 10 years to AWS technologies. This includes securing 5 gigawatts of capacity to support its AI model, Claude, as well as a direct investment of $5 billion from Amazon, with a potential for an additional $20 billion. Amazon CEO Andy Jassy noted that the company’s custom AI silicon is in high demand, with an AI revenue run rate surpassing $15 billion by Q1 2026.
Amazingly, Amazon’s chip segment is experiencing significant growth, boasting an annual revenue run rate exceeding $20 billion. However, the stock currently trades at a price-to-earnings ratio of 37, even as the company plans for $200 billion in capital expenditures by 2026. Observers express caution regarding Amazon’s valuation amidst its expansive investment strategy.
