Amazon’s Strategic AI Investments Amid Stock Underperformance
Amazon (AMZN -4.97%) has lagged the broader market with a 34% five-year gain compared to the S&P 500's 90% surge. Yet beneath the surface, the tech giant is making aggressive moves to dominate the next frontier of cloud computing—artificial intelligence.
The company's AWS division remains the cloud leader with 30% market share, outpacing Microsoft Azure and Google Cloud. Amazon's $34 billion Q2 capital expenditure—primarily for AI infrastructure—signals its commitment to maintaining dominance. Analysts project annual investments could reach $100 billion as the race for AI supremacy intensifies.
With AWS boasting 33% operating margins and $10.2 billion in Q2 operating income, these bets appear well-founded. The global AI cloud market, projected to hit $2 trillion by 2030, offers Amazon substantial runway for growth despite recent stock underperformance.
