Key Points
Nvidia (NASDAQ: NVDA) has increased by 1,500% over the past five years, driven by its dominance in AI chip production. Year-to-date, the company’s stock has risen approximately 25%, reflecting record earnings. Meanwhile, Amazon (NASDAQ: AMZN) has seen its shares climb over 30% since late March, indicating a potential parallel trajectory in the AI market.
Amazon Web Services (AWS) has established itself as the largest cloud service provider, contributing to a revenue run rate of over $15 billion in AI services alone—260 times larger than three years after its commercial launch. The company plans to invest $200 billion in capital expenditures over the next few years to meet rising demand, with substantial revenue projections for 2027-2028 tied to existing customer commitments.
Amazon’s chip business, which includes proprietary offerings like the Graviton CPU and Trainium AI chip, is seeing increased demand. This growth highlights potential for a stand-alone chip business in the future, pending the company’s ability to satisfy AWS customer needs. Currently trading at 30x forward earnings estimates, Amazon’s stock shows signs of being attractively priced as it approaches an Nvidia-like growth phase.
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