Amazon.com, Inc.

(NASDAQ Global Select)
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Bullish +75

Amazon Just Spent $7 Billion to Break Nvidia's Weak Spot Wide Open

AI infrastructure AI partnership Company update AI-generated analysis

πŸš€ Amazon is reportedly willing to spend around $7 billion on Israeli AI startup Decart to optimize software for running AI models across different chips.

πŸ’» Amazon's Trainium2 delivers about 30% more performance per dollar than comparable GPUs, with Trainium3 improving that by another 30% to 40%.

πŸ“ˆ Amazon has secured more than $225 billion in revenue commitments for its Trainium chips and is discussing selling them directly to outside companies.

πŸ’° Amazon reported Q2 fiscal 2026 revenue of $200.6 billion, beating estimates, with operating income climbing 43% to $27.5 billion.

☁️ AWS revenue surged 36.7% year-over-year to $42.2 billion, driven by strong growth in AI infrastructure and cloud computing services.

πŸ“Š The company raised its full-year 2026 capital expenditure forecast to about $220 billion to support continued investment in AI and cloud infrastructure.

πŸ” Analysts maintain a consensus 'Strong Buy' rating with a median price target of $328, implying 25% upside from the current share price.

πŸ’΅ Amazon generated $161 billion in operating cash flow over the past year, easily absorbing the proposed $7 billion deal for Decart.

🀝 CEO Andy Jassy estimates the chips unit could bring in about $50 billion a year if it were a standalone company selling to outside buyers.

Bullish Signals
  • Amazon is reportedly pursuing a deal to acquire Decart, an Israeli AI startup, for around $7 billion to lower switching costs for customers moving from Nvidia GPUs to Amazon's chips.
  • Amazon reported second-quarter fiscal 2026 revenue of $200.6 billion, beating Wall Street estimates, with operating income rising 43% to $27.5 billion.
  • AWS revenue grew 36.7% year-over-year to $42.2 billion, driven by rising demand for AI infrastructure and cloud computing services.
  • Amazon has more than $225 billion in Trainium revenue commitments and is discussing selling the chips directly to companies outside AWS.
  • The company raised its full-year 2026 cash capital expenditures forecast to about $220 billion, reflecting higher memory costs and continued investment in AI.
  • Wall Street analysts maintain a consensus 'Strong Buy' rating with a median price target of $328, reflecting an additional 25% upside from the current level.
  • Amazon generated $161 billion in operating cash flow over the past year, providing ample liquidity to absorb the proposed $7 billion investment in Decart.
Full Analysis
Amazon is reportedly pursuing a deal to acquire Decart, an Israeli AI startup valued at roughly $4 billion in May and previously reviewed by Anthropic for around $6 billion. CEO Andy Jassy estimates that if Amazon's chips unit were standalone, it would generate approximately $50 billion annually, ranking among the top three global data center chip businesses. The acquisition aims to lower switching costs for customers moving from Nvidia GPUs to Amazon's Trainium and Trainium3 chips, which offer 30% to 40% more performance per dollar. Amazon reported strong second-quarter fiscal 2026 earnings with revenue of $200.6 billion, beating Wall Street estimates, and operating income rising 43% to $27.5 billion. AWS revenue grew 36.7% year-over-year to $42.2 billion, driven by rising demand for AI infrastructure. The company has committed over $225 billion in revenue for its Trainium chips and is exploring direct sales to external companies, supported by significant capital expenditures of $53.1 billion focused on AWS and generative AI. Analysts remain bullish on Amazon stock, citing accelerating growth in AWS and advertising revenue alongside improving operating margins. The consensus rating is 'Strong Buy' with a median price target of $328, reflecting 25% upside from current levels. Despite carrying roughly $129 billion in net debt, Amazon generated $161 billion in operating cash flow over the past year, providing ample liquidity to absorb the proposed $7 billion investment in Decart.