Key Stats for Amazon Stock
- Post Market Price change for Amazon stock Today: -1%
- $AMZN Share Price as of Feb. 26: $205
- 52-Week High: $258
- $AMZN Stock Price Target: $280
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What Happened?
Amazon (AMZN) and other tech stocks slipped last week after OpenAI announced it raised $110 billion in a massive funding round, valuing the ChatGPT maker at $730 billion pre-money, up from $500 billion in October.
- Microsoft and Meta also dropped more than 2% and 1%, respectively, as investors digested the implications of the mega-round.
- The selloff came despite Amazon’s participation in the funding and its announcement of a major strategic partnership with OpenAI.
- Amazon committed to investing up to $50 billion in OpenAI, starting with an initial $15 billion followed by another $35 billion “in the coming months.”
- The second tranche is contingent on OpenAI hitting certain unspecified milestones and completing an IPO or direct listing by December 31, 2028.
As part of the deal, OpenAI will use Amazon Web Services infrastructure, including a commitment to deploy 2 gigawatts of Amazon’s Trainium AI chips for OpenAI’s new enterprise platform, Frontier.
OpenAI will spend $100 billion on AWS over the next eight years, expanding its existing $38 billion agreement signed last November.
The partnership marks a significant shift for Amazon, which has invested heavily in Anthropic, OpenAI’s primary rival.
Amazon has pumped billions into Anthropic since 2023 and built an $11 billion data center campus for the company in Indiana called Project Rainier.
CEO Andy Jassy said that the OpenAI deal doesn’t change Amazon’s relationship with Anthropic, noting both companies have multiple partners.
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What the Market Is Telling Us About Amazon Stock
Amazon stock has struggled recently, falling for nine straight days after its February 5 earnings report and shedding more than $450 billion in market value.
The selloff was driven primarily by concerns about Amazon’s massive $200 billion capital expenditure forecast for 2026, mostly for AI infrastructure.
However, some analysts view the OpenAI partnership as validation of Amazon’s AI spending plans.
William Blair analysts wrote that, with the OpenAI deal, the “bear thesis continues to erode” as AWS now has major partnerships with leading AI labs and is using its custom Trainium silicon.
They noted this “puts last quarter’s $200 billion capex announcement into context” and suggests “more AWS growth acceleration is on the come.”
The Trainium commitment is particularly significant. It demonstrates Amazon becoming a larger player in custom silicon, putting it in direct competition with Broadcom and Google while potentially threatening Nvidia’s chip dominance.
Amazon already has a chips business generating over $10 billion in annual revenue, growing at triple-digit year-over-year rates.
For Amazon stock, the partnership provides a boost to the company’s AI efforts, which have lagged behind competitors like Google and Microsoft.
Gaining access to OpenAI’s models could help Amazon catch up and potentially lead to future collaboration around agentic commerce, an emerging area where Amazon has remained on the sidelines while competitors like Walmart and Shopify have partnered with AI platforms.
Despite the positive long-term implications, Amazon stock closed just 1% higher on Friday after the initial selloff, suggesting investors remain cautious about near-term returns on the company’s massive AI investments.
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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!
