Amazon Stock 2024: Surging Operating Profits and a Bold AI Bet
- Why Is Amazon Restructuring Its AI Leadership?
- The $10B OpenAI Gambit: More Than Just Money
- Bank of America’s Bullish Take
- Graviton Chips: Amazon’s Secret Weapon?
- Quantitative Edge: The Numbers Behind the Hype
- FAQ: Your Burning Questions Answered
Amazon is making waves with a strategic double-play in the AI race, combining leadership reshuffles, a rumored $10B OpenAI deal, and a push to challenge Nvidia’s dominance. With operating profits rising and its stock at a technical crossroads, here’s what investors need to know—straight from the trenches of Silicon Valley’s latest power move.
Why Is Amazon Restructuring Its AI Leadership?
Amazon confirmed this week that Rohit Prasad, head of Artificial General Intelligence (AGI), is exiting. His replacement? Peter DeSantis, a 27-year company veteran tasked with merging AI model development with Amazon’s in-house chip division (think Graviton and Trainium) and quantum computing. This consolidation aims to streamline infrastructure and offer cheaper alternatives to Nvidia’s pricey hardware—a MOVE analysts call "a direct shot across Nvidia’s bow."
The $10B OpenAI Gambit: More Than Just Money
Sources say Amazon is in advanced talks to invest over $10B in OpenAI. The twist? OpenAI would reportedly use Amazon’s proprietary chips, potentially legitimizing Amazon’s silicon strategy overnight. "If OpenAI jumps ship from Nvidia, it’s game on," notes a BTCC analyst. The deal could be announced imminently, with Amazon’s stock currently testing key support at €188.63.
Bank of America’s Bullish Take
Bank of America doubled down on its "Buy" rating, citing Amazon’s Q3 EPS of $1.95 (beating estimates) and its "unmatched cloud-AI synergy." But the chart tells a nuanced story: the stock is down YTD, sandwiched between support (€188.63) and resistance (€199.53). A break either way could signal the next major move.
Graviton Chips: Amazon’s Secret Weapon?
Amazon’s bet on custom silicon isn’t new, but its timing is impeccable. With Nvidia’s H100 chips in short supply, Graviton and Trainium offer cost-efficient alternatives. "They’re not just selling cloud space—they’re selling the picks and shovels," observes a TradingView contributor. The risk? Convincing developers to migrate from CUDA, Nvidia’s entrenched ecosystem.
Quantitative Edge: The Numbers Behind the Hype
Amazon Web Services (AWS) revenue grew 12% YoY in Q3, while operating income hit $7.7B. But margins face pressure from heavy AI investments. "This is a classic ‘spend to grow’ phase," says a CoinMarketCap analyst. The 200-day moving average (€188) now acts as a make-or-break level for traders.
FAQ: Your Burning Questions Answered
Should I buy Amazon stock now?
The stock’s 2024 performance hinges on AI execution. A confirmed OpenAI deal could spark a rally, but watch the €188 support level.
How does Amazon’s AI strategy differ from Microsoft’s?
Microsoft leans on OpenAI partnerships; Amazon is vertically integrating chips, cloud, and AI models. Think "Apple-like control" versus "Windows-like openness."
Are Amazon’s chips really competitive with Nvidia?
For specific workloads, yes—especially in cost efficiency. But Nvidia still leads in raw performance and developer tools.
