Amazon's AI Chip Business Poised for Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 13 2026
0mins
Source: NASDAQ.COM
- Cloud Revenue Surge: Amazon Web Services (AWS) contributed nearly 60% of operating income in the latest fiscal year, achieving an annual revenue run rate of $142 billion, which underscores its dominant position in the cloud computing market and enhances Amazon's profitability.
- Chip Demand Explosion: The in-house developed Trainium2 chip is nearly sold out, while the recently launched Trainium3 is almost fully subscribed, indicating that the annual revenue run rate for this chip business will exceed $20 billion, reflecting strong market demand for cost-effective AI chips.
- Competitive Pressure: Amazon's potential future sales of chips to third parties could pressure Nvidia to accelerate its innovation pace to maintain market share, even though AWS does not directly compete with Nvidia in the premium chip market.
- Investor Confidence Boost: While Amazon's chip business may capture some market share, Nvidia is still viewed as a strong long-term investment due to its extensive customer base and proven innovation capabilities, leading investors to remain optimistic about its future performance.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 211.140
Low
200.00
Averages
264.97
High
352.00
Current: 211.140
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
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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