Key Points
Amazon (NASDAQ: AMZN) announced that its capital spending will increase to $220 billion in 2024, up from $200 billion in 2023, to address the surging demand for cloud computing services through its Amazon Web Services (AWS) division. This investment aims to bolster capacity in response to a significant rise in artificial intelligence (AI) workloads.
During the latest earnings call, CEO Andy Jassy stated that even this elevated spending will not meet projected demand through 2026 and 2027. The ongoing growth in AI applications is expected to further benefit suppliers like Micron Technology (NASDAQ: MU) and Broadcom (NASDAQ: AVGO), which provide essential memory and networking products crucial for data centers.
The demand for memory products is notably high due to AI’s expanding capabilities, placing pressure on supply and driving up prices. This combination of factors suggests a strong revenue outlook for both Micron and Broadcom as the AI market approaches a potentially trillion-dollar valuation.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
