Amazon.com Inc. (AMZN) shares climbed on Thursday as investors returned to mega-cap tech stocks and digested a report that the company is considering selling its custom artificial intelligence chips to customers outside of Amazon Web Services. The stock was up 2.55% at $243.56 at the time of publication.
The broader market also had a good day: the Nasdaq Composite gained 2.3%, and the S&P 500 advanced 0.8%. Tech stocks led the charge with a 2.9% gain, and seven of the 11 S&P 500 sectors finished higher.
AI Chip Expansion Adds Fresh Catalyst
The rally was fueled in part by a Bloomberg report that Amazon is in talks to sell its custom Trainium AI chips for deployment in third-party data centers. If it happens, this would be a big deal — it would mean Amazon is taking its fight with Nvidia Corp. (NVDA) beyond the cloud and into the broader AI chip market.
Amazon's AI chief, Peter DeSantis, confirmed to Bloomberg that the company has started discussions with potential customers, though he declined to name names. “We view AI infrastructure as rapidly evolving,” DeSantis said. “And we’re constantly looking at ways to get to more customers.”
Demand for sovereign AI infrastructure — basically, countries wanting their own AI computing power — is growing, especially outside the U.S. DeSantis said AWS hasn't been hurt by Europe's push to reduce reliance on American tech. He also noted that Amazon's third-generation Trainium chips are “largely sold out,” and interest is already building for the fourth-generation chips expected next year.
One concern might be that selling chips outside AWS could cannibalize Amazon's cloud business. DeSantis doesn't see it that way. “There’s so much underconsumption in AI,” he said. Trainium chips are already available through AWS and are used by customers including OpenAI, Anthropic, and Uber Technologies.
Amazon Technical Picture Remains Mixed
Amazon's longer-term trend looks fine, but short-term signals are a bit messy. The stock is trading about 4.8% above its 200-day simple moving average and 3.6% above its 100-day moving average. But it's still 4.1% below its 20-day moving average and 5% below its 50-day moving average, suggesting it's recovering from a recent pullback but hasn't fully bounced back.
Momentum indicators are cautious too. The moving average convergence divergence (MACD) indicator is below its signal line, and the histogram is negative — meaning bullish momentum has weakened. The moving averages themselves are sending mixed signals: the 20-day is below the 50-day (short-term bearish), but the 50-day remains above the 200-day after the golden cross formed in May (long-term bullish).
Technical analysts are watching resistance near $275, close to the stock's 52-week high of $278.56. Initial support is around $226.50.
Earnings And Analyst Outlook
Amazon is expected to report second-quarter results on July 30. Wall Street expects earnings of $1.81 per share, up from $1.68 a year earlier. Revenue is projected to hit $196.03 billion, up from $167.70 billion.
The stock carries a consensus Buy rating with an average analyst price target of $320.86. Recent analyst moves include:
- Truist Securities raised its price target to $320 from $290 on May 29, maintaining a Buy rating.
- Wells Fargo lowered its target to $312 from $315 on May 20, but kept an Overweight rating.
- TD Cowen held steady with a Buy rating and $350 target on May 12.
MarketDash Edge Rankings
According to MarketDash Edge data, Amazon has a Growth score of 95.61, reflecting strong long-term growth expectations. Its Momentum score is 54.13, and its Quality score is 52.86 — solid fundamentals but more moderate near-term momentum.
ETF Exposure
Amazon is a top holding in several growth-focused ETFs, including the American Century Focused Dynamic Growth ETF (FDG), the Franklin Focused Growth ETF (FFOG), and the Direxion Daily Magnificent 7 Bull 2X Shares ETF (QQQU). Big inflows or outflows from these funds can move Amazon's stock.
