Amazon Plans to Sell Trainium Chips to Data Centers
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 hours ago
0mins
Source: NASDAQ.COM
- New Chip Sales Direction: Amazon is reportedly in early talks to sell its Trainium accelerators to other companies' data centers, a move that could position its chips in direct competition with Nvidia's GPUs, potentially reshaping the market landscape.
- Revenue Growth Momentum: Amazon's custom chip business surpassed a $20 billion annual revenue run rate in Q1 2026, growing at a triple-digit pace, indicating strong market demand and future expansion potential.
- Strong Customer Commitments: Major clients like OpenAI and Anthropic have committed to using Trainium, with OpenAI securing about 2 gigawatts of capacity through AWS and Anthropic signing for up to 5 gigawatts, reflecting robust demand for Amazon's chips.
- Intensifying Market Competition: While Amazon's Trainium chips may pressure Nvidia's pricing power, Nvidia's business continues to accelerate, with data center revenue rising 92% year-over-year to $75.2 billion in Q1 2027, suggesting a large enough market to support both companies.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 237.500
Low
175.00
Averages
280.01
High
325.00
Current: 237.500
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Analyst Price Target Increase: A Wall Street analyst raised Marvell's 12-month price target from $260 to $385, primarily based on the company's opportunities in optical networking, indicating a bullish outlook on its performance.
- Data Center Revenue Surge: Marvell reported approximately $1.83 billion in data center revenue for Q1 FY2027, a 27% year-over-year increase, accounting for 76% of total revenue, showcasing the company's robust performance in AI-related bookings.
- Trainium Market Potential: Amazon's plan to sell its Trainium AI chips to external companies could expand Marvell's custom silicon market, although the design work for the newer chips has reportedly shifted to a Taiwanese competitor, adding uncertainty to future revenue streams.
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- Market Expansion Potential: Amazon Web Services is in talks to sell its custom Trainium AI chips to external companies, which could significantly expand the market and increase business opportunities for Marvell, as it is a design partner for Trainium.
- Strong Financial Performance: Marvell's data center revenue reached approximately $1.83 billion in the first quarter of fiscal 2027, a 27% year-over-year increase, accounting for 76% of total revenue, with overall revenue hitting a record $2.4 billion, up 28%, indicating robust market demand.
- Surge in AI-Related Bookings: CEO Matt Murphy stated that the company raised its revenue outlook for fiscal years 2027 and 2028 due to exceptional AI-related bookings, highlighting the sustained strong demand in the AI market.
- Design Transfer Risks: While the potential expansion of the Trainium market may benefit Marvell, reports suggest that Amazon might shift the design work for the newer Trainium chips to Taiwanese firm Alchip Technologies, which could impact Marvell's future revenue streams.
See More
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- Analyst Target Upgrade: A Wall Street analyst raised Marvell's 12-month price target from $260 to $385, primarily based on the company's opportunities in optical networking, further fueling the stock's ascent.
- Data Center Revenue Growth: Marvell reported approximately $1.83 billion in data center revenue for Q1 FY2027, a 27% year-over-year increase, accounting for 76% of total revenue, indicating robust performance and demand in AI-related bookings.
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- Strong Market Demand: Amazon's Trainium business surpassed a $20 billion annual revenue run rate in Q1 2026, growing at a triple-digit pace, with major clients like OpenAI and Anthropic committed to using its chips, highlighting robust market demand.
- Clear Cost Advantage: Amazon argues that Trainium performs the same tasks at a lower cost than comparable GPUs, and external sales are not expected to cannibalize AWS demand, indicating its growing competitiveness in the AI computing sector.
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See More
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- New Chip Sales Direction: Amazon is reportedly in early talks to sell its Trainium accelerators to other companies' data centers, a move that could position its chips in direct competition with Nvidia's GPUs, potentially reshaping the market landscape.
- Revenue Growth Momentum: Amazon's custom chip business surpassed a $20 billion annual revenue run rate in Q1 2026, growing at a triple-digit pace, indicating strong market demand and future expansion potential.
- Strong Customer Commitments: Major clients like OpenAI and Anthropic have committed to using Trainium, with OpenAI securing about 2 gigawatts of capacity through AWS and Anthropic signing for up to 5 gigawatts, reflecting robust demand for Amazon's chips.
- Intensifying Market Competition: While Amazon's Trainium chips may pressure Nvidia's pricing power, Nvidia's business continues to accelerate, with data center revenue rising 92% year-over-year to $75.2 billion in Q1 2027, suggesting a large enough market to support both companies.
See More
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- Record High Stock Price: Marvell Technology's shares hit a record high of approximately $330 on Thursday before closing at $311, reflecting strong market confidence in its future growth prospects.
- Analyst Price Target Increase: A Wall Street analyst raised Marvell's 12-month price target from $260 to $385, primarily based on the company's opportunities in optical networking, indicating a bullish outlook on its performance.
- Data Center Revenue Surge: Marvell reported approximately $1.83 billion in data center revenue for Q1 FY2027, a 27% year-over-year increase, accounting for 76% of total revenue, showcasing the company's robust performance in AI-related bookings.
- Trainium Market Potential: Amazon's plan to sell its Trainium AI chips to external companies could expand Marvell's custom silicon market, although the design work for the newer chips has reportedly shifted to a Taiwanese competitor, adding uncertainty to future revenue streams.
See More
Amazon Cloud May Sell Trainium Chips to External Companies
- Market Expansion Potential: Amazon Web Services is in talks to sell its custom Trainium AI chips to external companies, which could significantly expand the market and increase business opportunities for Marvell, as it is a design partner for Trainium.
- Strong Financial Performance: Marvell's data center revenue reached approximately $1.83 billion in the first quarter of fiscal 2027, a 27% year-over-year increase, accounting for 76% of total revenue, with overall revenue hitting a record $2.4 billion, up 28%, indicating robust market demand.
- Surge in AI-Related Bookings: CEO Matt Murphy stated that the company raised its revenue outlook for fiscal years 2027 and 2028 due to exceptional AI-related bookings, highlighting the sustained strong demand in the AI market.
- Design Transfer Risks: While the potential expansion of the Trainium market may benefit Marvell, reports suggest that Amazon might shift the design work for the newer Trainium chips to Taiwanese firm Alchip Technologies, which could impact Marvell's future revenue streams.
See More
Marvell Technology Stock Hits Record High Amid Amazon Chip Talks
- Stock Surge: Marvell Technology's shares reached a record high of approximately $330 on Thursday before closing at $311, up about 7% from the previous day, reflecting strong market confidence in its future growth prospects.
- Analyst Target Upgrade: A Wall Street analyst raised Marvell's 12-month price target from $260 to $385, primarily based on the company's opportunities in optical networking, further fueling the stock's ascent.
- Data Center Revenue Growth: Marvell reported approximately $1.83 billion in data center revenue for Q1 FY2027, a 27% year-over-year increase, accounting for 76% of total revenue, indicating robust performance and demand in AI-related bookings.
- Market Potential and Risks: While the expansion of the Trainium chip market could provide Marvell with more custom silicon supply opportunities, the shift of design work to Taiwanese rival Alchip Technologies poses risks, alongside a forward P/E ratio of 70 that may limit further stock price appreciation.
See More
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- Anti-Fraud Initiative Promotion: On May 14, 2026, VP JD Vance delivered remarks at Bangor International Airport in Maine, emphasizing the administration's efforts in anti-fraud initiatives aimed at enhancing public trust in government transparency, thereby increasing support for government policies.
- Iran Agreement Response: Vance asserted that the U.S. is not paying Iran and that any economic benefits will depend on Iran's full compliance with a 14-point memorandum of understanding, a stance intended to quell criticism of the Trump administration's agreement with Iran and safeguard U.S. strategic interests in the Middle East.
- Oil Market Stability: Despite over 12 million barrels of oil tankers crossing the Strait of Hormuz, oil prices showed only modest fluctuations, indicating a cautious market response to the agreement, as investors await clearer evidence that the deal can lead to lasting de-escalation in the region.
- Fed Policy Adjustments: New Fed Chair Kevin Warsh indicated a more hawkish stance, suggesting potential interest rate increases in the coming months, a signal that prompts investors to reassess borrowing costs, which could have profound implications for economic growth.
See More
Amazon Plans to Sell Custom AI Chips, Competing with Nvidia
- Chip Sales Transformation: Amazon is in discussions to sell its custom Trainium accelerators to potential buyers, indicating a shift from solely renting through AWS to direct sales, which could challenge Nvidia's market dominance.
- Strong Market Demand: Amazon's Trainium business surpassed a $20 billion annual revenue run rate in Q1 2026, growing at a triple-digit pace, with major clients like OpenAI and Anthropic committed to using its chips, highlighting robust market demand.
- Clear Cost Advantage: Amazon argues that Trainium performs the same tasks at a lower cost than comparable GPUs, and external sales are not expected to cannibalize AWS demand, indicating its growing competitiveness in the AI computing sector.
- Positive Market Reaction: Although Amazon's plans could pressure Nvidia's pricing power, the market generally believes both can coexist, as evidenced by a 3% rise in stock prices for both companies on the day the news broke, reflecting investor optimism about market prospects.
See More
Amazon Plans to Sell Trainium Chips to Data Centers
- New Chip Sales Direction: Amazon is reportedly in early talks to sell its Trainium accelerators to other companies' data centers, a move that could position its chips in direct competition with Nvidia's GPUs, potentially reshaping the market landscape.
- Revenue Growth Momentum: Amazon's custom chip business surpassed a $20 billion annual revenue run rate in Q1 2026, growing at a triple-digit pace, indicating strong market demand and future expansion potential.
- Strong Customer Commitments: Major clients like OpenAI and Anthropic have committed to using Trainium, with OpenAI securing about 2 gigawatts of capacity through AWS and Anthropic signing for up to 5 gigawatts, reflecting robust demand for Amazon's chips.
- Intensifying Market Competition: While Amazon's Trainium chips may pressure Nvidia's pricing power, Nvidia's business continues to accelerate, with data center revenue rising 92% year-over-year to $75.2 billion in Q1 2027, suggesting a large enough market to support both companies.
See More
