Amazon 30% rise, AI demand is driving AWS
Amazon shares have risen 3since the end of 30%. Demand for AI at AWS, its in-house Graviton and Trainium chips, and easing concerns about the stock’s valuation were cited as reasons for the rise.
Amazon shares have risen 3since the end of 30%. Behind the rise is AI demand for AWS, Amazon’s cloud business. AWS is once again attracting market attention as more corporate customers use AI services.
AWS is one of Amazon’s core businesses. Companies need substantial server capacity and computing power to build and operate AI models. This demand was cited as a factor boosting expectations for cloud revenue.
Amazon’s in-house chip business was also cited. Its flagship products are Graviton and Trainium. Graviton is a chip for cloud servers, while Trainium is used for AI training workloads.
Amazon has so far mainly used its own chips within AWS. The possibility has also been raised that this could grow into a separate chip business. In that case, Amazon could be viewed as both a cloud company and an AI chip company.
Whether its share price is expensive or cheap relative to its earnings was also discussed. Amazon's share price was presented as a multiple of its expected earnings of 30 times. Among stocks that have attracted growing AI-related expectations, it was viewed as not excessively expensive.
The movement of investment funds was also cited as part of the backdrop. After AI leaders such as Nvidia, whose shares have already risen significantly, investors are looking for the next stocks to benefit from AI. Amazon was mentioned as a company with both AWS and its own chips.
Sources: The Motley Fool
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