What Happened?
Shares of cloud computing and online retail behemoth Amazon (NASDAQ: AMZN) jumped 4.5% in the afternoon session after CEO Andy Jassy's annual shareholder letter revealed that the company's artificial intelligence (AI) business was performing strongly.
In the letter, Jassy disclosed that AI services at its cloud-computing unit, AWS, reached an annualized revenue of more than $15 billion. He defended the company's large spending on infrastructure as a necessary investment to become a leader in the field.
Adding to the positive news, Amazon's pharmacy announced a new partnership with Eli Lilly to provide same-day delivery for its GLP-1 pill. The stock's rise was also supported by a drop in energy prices, linked to a reported ceasefire between the U.S. and Iran, which lowered Amazon's shipping costs. Several analysts reacted positively, with some raising their price targets, viewing the company's AI spending as a key driver for future revenue.
After the initial pop the shares cooled down to $231.74, up 4.7% from previous close.
Is now the time to buy Amazon? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Amazon’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 10.4% on the news that the company reported third-quarter results that surpassed Wall Street's expectations, driven by strong growth in its cloud computing division. Amazon's net sales rose 13.4% from the previous year to $180.2 billion, beating estimates, while earnings per share came in at $1.95, also well above analysts' forecasts. A key highlight was Amazon Web Services (AWS), the company's cloud unit, where sales growth accelerated to 20%, a rate not seen since 2022, reaching $33.01 billion. This strong performance from its most profitable division reassured investors. Additionally, the company's advertising business continued to show robust growth, with revenue increasing by 21.4% year-over-year. The positive results across key segments, particularly the acceleration in AWS, signaled healthy demand for the tech giant. Operating profit missed, but excluding two one-time charges, it would have beaten, and the market appeared to understand this. Overall, this print featured some key positives.
Amazon is up 2.3% since the beginning of the year, and at $231.74 per share, it is trading close to its 52-week high of $254 from November 2025. Investors who bought $1,000 worth of Amazon’s shares 5 years ago would now be looking at an investment worth $1,375.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.
Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.
