Amazon's Trainium Chips Attract AI Developers Away from Nvidia
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 19 2026
0mins
Source: seekingalpha
- Increased Market Competition: Amazon's Trainium AI accelerators are beginning to attract some AI developers who have historically relied on Nvidia's products, indicating a growing competitive edge in the AI accelerator market.
- Improved Software Support: Daniel Svonava, CEO of Superlinked, noted that improvements in software support over the past few months have alleviated developers' concerns about Trainium, thereby enhancing its market acceptance.
- Significant Cost Benefits: Bojan Jakimovski, machine learning lead at Loka, highlighted that one client found that switching inference workloads to Trainium's second-generation chips could reduce costs by up to 35% compared to Nvidia's H100, further increasing Trainium's appeal.
- Huge Revenue Potential: Amazon CEO Andy Jassy stated that the company's chip business could generate $50 billion in annual revenue as a standalone entity, underscoring its significant position in the global data center chip market.
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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: 271.850
Low
175.00
Averages
280.01
High
325.00
Current: 271.850
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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- Cloud Infrastructure Growth: Amazon Web Services (AWS) reported a 28% year-over-year revenue increase to $37.59 billion in Q1, surpassing Wall Street estimates, indicating that AI demand is driving higher utilization rates and promising future growth.
- E-commerce and Digital Advertising Integration: As the world's largest online retailer, Amazon's advertising revenue grew 24% year-over-year to $17.24 billion in Q1, with AI integration expected to enhance profitability and market share in both e-commerce and advertising sectors.
- Profit Driver: Although AWS accounted for only 20.7% of total sales in Q1, it generated the majority of profits, and with the cloud business accelerating, Amazon's earnings outlook is increasingly positive, boosting investor confidence.
See More
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- Competitive Risk Analysis: Amazon faces intense competition from tech giants like Microsoft, with regulatory risks from antitrust investigations potentially impacting its marketplace management, while eBay contends with local marketplace competition and AI-driven shopping platforms, increasing operational costs.
- Future Growth Potential: In Q1 2026, Amazon's sales totaled $181.5 billion, a 17% year-over-year increase, while AWS grew at 28%, highlighting the potential returns from its investments in AI infrastructure and suggesting strong growth prospects ahead.
See More
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- Competition and Risks: Amazon faces intense competition from tech giants like Microsoft, with regulatory risks from antitrust investigations potentially impacting its marketplace management, while eBay contends with local marketplace competition and AI-driven shopping platforms, increasing operational costs and traffic risks.
- Future Growth Potential: While eBay excels in the used goods market, Amazon's rapid expansion into AI infrastructure is notable, with Q1 2026 sales reaching $181.5 billion, a 17% year-over-year increase, and AWS growing at 28%, highlighting its significant future growth potential.
See More
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- Service Expansion Plan: The service will be available to select public passengers in San Francisco, Los Angeles, and Phoenix, with plans to expand to San Diego, Las Vegas, and Denver this summer, further broadening its user base and market coverage.
- Technological Innovation: The Ojai model utilizes the sixth-generation Waymo Driver system, equipped with improved lidar and audio receivers that can better detect surroundings in adverse weather conditions, enhancing safety and user experience.
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See More
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- Impact of Digital Transformation: The share of younger digital members has surged from 5% in 2019 to nearly 50%, which, while boosting membership revenue, has led to lower renewal rates for these new members, highlighting challenges in attracting long-term loyal customers for Costco.
- Market Environment Pressures: As lower-income consumers become more cautious with spending, the slowdown in membership growth is evident; although high gas prices may enhance membership appeal, fewer new warehouse openings limit growth potential in international markets, posing challenges for Costco's overall business.
See More
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- New Model Launch: Waymo's newly introduced Ojai vehicles are roomier and feature removable steering wheels, significantly reducing manufacturing costs, aimed at enhancing market competitiveness and meeting diverse customer needs.
- Service Expansion Plan: Waymo plans to offer rides in Ojai robotaxis to select customers in San Francisco, Los Angeles, and Phoenix, with an expected expansion to San Diego, Las Vegas, and Denver this summer, further broadening its market coverage.
- Technological Innovation: The Ojai model utilizes the sixth-generation Waymo Driver system, which enhances low-light detection capabilities, and integrates new hardware and software to improve safety in adverse weather conditions.
- Safety Issue Management: Despite facing a voluntary recall of about 3,800 robotaxis to address software issues, Waymo remains committed to achieving its goal of 1 million autonomous rides per week by year-end, demonstrating its ambition in technology and market leadership.
See More
