Key Stats for Amazon Stock
- Price Change for Amazon stock: -0.6%
- $AMZN Share Price as of Dec. 17: $221
- 52-Week High: $259
- $AMZN Stock Price Target: $296
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What Happened?
Last month, Amazon (AMZN) stock surged to a record closing high after OpenAI signed a massive $38 billion deal to buy cloud computing capacity from Amazon Web Services.
The agreement was OpenAI’s first contract with the cloud infrastructure leader and signals the AI startup is no longer solely reliant on Microsoft.
Under the deal, OpenAI will immediately begin running workloads on AWS infrastructure, tapping hundreds of thousands of Nvidia GPUs in the U.S., with plans to expand capacity over the next seven years.
The first phase uses existing AWS data centers, and Amazon will eventually build out additional infrastructure specifically for OpenAI.
The announcement came just days after Microsoft’s preferential status with OpenAI expired under newly negotiated commercial terms, freeing the ChatGPT creator to partner more widely with other cloud providers.
OpenAI has been on a dealmaking spree lately, announcing roughly $1.4 trillion worth of buildout agreements with companies including Nvidia, Broadcom, Oracle, and Google.
But the AWS pact is particularly significant given Amazon’s market leadership position. While OpenAI had previously forged cloud deals with Oracle and Google, AWS is by far the biggest player.
The deal also represents a notable shift since OpenAI had an exclusive cloud agreement with Microsoft until January of this year.
Beyond the cloud deal, CNBC confirmed that OpenAI is in discussions with Amazon about a potential investment that could exceed $10 billion. The talks also include an agreement for OpenAI to use Amazon’s custom AI chips, though details remain fluid.
These discussions come after OpenAI completed a restructuring in October that gave it more freedom to raise capital and partner across the broader AI ecosystem. Microsoft has invested more than $13 billion in OpenAI since 2019, but it no longer has the right of first refusal to be OpenAI’s compute provider.
Amazon stock could benefit from deeper exposure to the booming generative AI market. The e-commerce giant has already invested at least $8 billion into OpenAI rival Anthropic, and AWS has been designing its own AI chips since around 2015.
The hardware has become crucial for AI companies trying to train models and meet growing demand for compute. AWS announced its Inferentia chips in 2018 and the latest generation of its Trainium chips earlier this month.
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What the Market Is Telling Us About Amazon Stock
The ongoing surge in Amazon stock reflects investor excitement about AWS capturing a larger piece of the AI infrastructure buildout.
While AWS reported more than 20% year-over-year revenue growth last quarter, that trailed Microsoft’s 40% cloud expansion and Google’s 34% growth, suggesting Amazon had been losing some ground in the AI race.
The OpenAI deal changes that narrative. “The breadth and immediate availability of optimized compute demonstrates why AWS is uniquely positioned to support OpenAI’s vast AI workloads,” AWS CEO Matt Garman said in the release.
For OpenAI, the AWS agreement is another step toward a potential public listing. By diversifying its cloud partners and locking in long-term capacity, OpenAI is signaling both independence and operational maturity.
CEO Sam Altman acknowledged in a recent livestream that an IPO is “the most likely path” given the company’s massive capital needs.
The current agreement explicitly covers the use of Nvidia chips, including two popular Blackwell models, but there’s potential to incorporate Amazon’s custom-built Trainium chips down the road.
AWS VP Dave Brown told CNBC that Amazon likes Trainium because it delivers better price-performance and more choice for customers. However, he couldn’t provide details on any Trainium discussions with OpenAI yet.
Amazon also stated that it is reorganizing its AI teams into a broader division. CEO Andy Jassy said Amazon has reached an “inflection point” with AI technologies and is bringing unified focus under longtime executive Peter DeSantis.
The move comes as Amazon races to beat the perception that it’s falling behind rivals in developing AI products.
With the $38 billion OpenAI deal locked in and potential for a $10+ billion equity investment on top of that, Amazon stock looks positioned to capture significant upside from the AI infrastructure boom—assuming the country has the power and resources to turn these ambitious promises into reality.
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How Much Upside Does Amazon Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
