Amazon Stock Dips as AWS Loses Ground in AI Cloud Race

Amazon shares fell 1.14% as the company struggles to keep pace in the AI-driven cloud market. While the Nasdaq 100 has surged nearly 12% this year, Amazon's 4% gain lags behind peers, reflecting investor concerns over its AI competitiveness.

The departure of Rami Sinno, Amazon's former AI chip director, to Arm Holdings marks a strategic setback. Sinno led development of Amazon's Trainium and Inferentia processors at Annapurna Labs—key components in the AI infrastructure race.

AWS growth continues to trail rivals, with Q2 2025 revenue rising just 17% compared to Microsoft Azure's 39% and Google Cloud's 32% expansion. Analysts warn Azure could overtake AWS by 2026 if current trends persist, despite Amazon's $100 billion planned investment in cloud and AI infrastructure.