Nvidia Stock Surges 18% Amid AI Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy AMZN?
Source: CNBC
- Stock Performance: Nvidia's stock has surged over 18% in the past ten days, marking the longest winning streak since 2023, reflecting strong market demand for its AI chips.
- Order Surge: CEO Jensen Huang announced at the GTC conference that Nvidia has over $1 trillion in orders for its GPUs through 2027, underscoring its market leadership in AI technology.
- Data Center Revenue Growth: Nvidia's data center revenue has increased by 75% year-over-year, now comprising 88% of its business, indicating a successful shift from gaming to AI-driven revenue streams.
- New Product Launches: At the GTC conference, Nvidia unveiled new AI chips and standalone Vera CPUs, catering to high-performance computing needs from major clients like Meta, further solidifying its market position.
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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: 248.500
Low
175.00
Averages
280.01
High
325.00
Current: 248.500
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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- Operating Cash Flow Growth: Amazon's operating cash flow increased by 20% in 2025 to $139.5 billion, resulting in a price-to-operating cash flow ratio of about 19, which presents a more attractive valuation metric compared to its high price-to-earnings ratio, reflecting the company's current earnings power.
- Impact of Investment Cycle: While Amazon is undergoing a significant capital expenditure cycle that may lead to increased depreciation in 2026, management believes that if these expenditures yield favorable returns, future earnings could improve significantly, particularly with investments in AI.
- Optimistic Market Outlook: Analysts project a potential 12% annual compounded growth rate for Amazon's stock over the next year, with a current price of $248 expected to reach $278 in one year and $437 in five years, reflecting confidence in AWS's continued growth.
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- Advertising Segment Growth: Amazon's advertising revenue has surpassed $60 billion annually and continues to grow at double-digit rates, leveraging user intent for more effective ads compared to other digital formats, thereby expanding its footprint in the digital advertising market.
- Retail Market Position: While retail growth is slowing, Amazon remains the largest e-commerce platform in the U.S. with $426 billion in sales in 2022 and over 200 million Prime members globally, continuously feeding data into its other business segments and enhancing competitive strength.
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- Increased Trading Activity: As indices rise, market trading activity has noticeably increased, suggesting a positive response from investors to the current market environment, potentially signaling broader investment trends.
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See More
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- Strong Financial Performance: Amazon's consolidated net sales rose 14% year-over-year in Q4 2025 to $213.4 billion, with AWS revenue increasing 24% to $35.6 billion, indicating robust momentum in its cloud computing business that is expected to further enhance overall profitability.
- Operating Cash Flow Growth: Amazon's operating cash flow increased by 20% in 2025 to $139.5 billion, resulting in a price-to-operating cash flow ratio of about 19, which presents a more attractive valuation metric compared to its high price-to-earnings ratio, reflecting the company's current earnings power.
- Impact of Investment Cycle: While Amazon is undergoing a significant capital expenditure cycle that may lead to increased depreciation in 2026, management believes that if these expenditures yield favorable returns, future earnings could improve significantly, particularly with investments in AI.
- Optimistic Market Outlook: Analysts project a potential 12% annual compounded growth rate for Amazon's stock over the next year, with a current price of $248 expected to reach $278 in one year and $437 in five years, reflecting confidence in AWS's continued growth.
See More
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- Cloud Computing Backbone: Amazon Web Services (AWS) is projected to contribute 57% of the $80 billion operating income in 2025, with a 20% growth driven by rising demand for AI workloads, highlighting its critical role in future profitability.
- Advertising Segment Growth: Amazon's advertising revenue has surpassed $60 billion annually and continues to grow at double-digit rates, leveraging user intent for more effective ads compared to other digital formats, thereby expanding its footprint in the digital advertising market.
- Retail Market Position: While retail growth is slowing, Amazon remains the largest e-commerce platform in the U.S. with $426 billion in sales in 2022 and over 200 million Prime members globally, continuously feeding data into its other business segments and enhancing competitive strength.
- Investment and Risks: Amazon plans to invest $200 billion in AI infrastructure by 2026, which may pressure margins and cash flow in the short term, but if successful, could drive sustained growth in the long run.
See More
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- AI Impact Assessment: Microsoft shares have dropped approximately 20% since the start of the year due to concerns over the impact of artificial intelligence on software-as-a-service (SaaS) companies and its AI infrastructure spending; while its enterprise software business remains relatively stable, the competitive cloud market and lack of top AI models and custom chips place it at a disadvantage.
- Collaboration with OpenAI: Although Microsoft's early partnership with OpenAI seemed wise during the AI boom, its reliance on these models has hindered its progress in developing custom AI chips, which remains in the early stages and has not effectively enhanced its market competitiveness.
- Alphabet's Advantage: Alphabet holds a significant edge in the AI space with its seventh-generation tensor processing units (TPUs), which provide cost advantages in AI model training and inference, and it has secured a $21 billion order from Anthropic, further solidifying its market position.
- Amazon's Dual Growth: As the largest cloud service provider, Amazon's custom chip business is rapidly growing, projected to reach a $20 billion run-rate, and its Trainium chips are expected to significantly reduce capital expenditures while boosting operating margins, positioning it strongly for future market potential with dual growth drivers in cloud computing and e-commerce.
See More
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- Partnership Expansion: Oracle has expanded its partnership with Bloom Energy to procure up to 2.8 GW of fuel cell systems, which will support its AI projects and meet cloud infrastructure demand, thereby enhancing its competitive position in the AI sector.
- Cloud Infrastructure Investment: Oracle plans to raise between $45 billion and $50 billion through a mix of debt and equity financing to expand its cloud infrastructure, which is expected to significantly enhance its service capabilities to meet the demands of major clients like AMD, Meta, and Nvidia.
- Strong Financial Performance: In its latest earnings report, Oracle reported a 22% year-over-year revenue growth to $17.2 billion, with cloud revenues climbing 44%, indicating that demand for its AI cloud computing is outpacing supply and suggesting strong growth potential ahead.
- Market Optimism: Analysts are optimistic about Oracle, with 34 out of 35 covering analysts rating the stock as 'Buy' or higher, and a 12-month price target of $243.87, reflecting an upside potential of about 37%, which underscores market confidence in its AI infrastructure investments.
See More
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- Redemption Policy: Apollo Global Management has set a 5% quarterly redemption limit in its private credit fund, despite other firms relaxing their limits, aiming to maintain liquidity and bolster investor confidence, even as it faces redemption requests representing 11% of its assets.
- Market Risk Assessment: CEO Marc Rowan stated that software sector valuations are generally overstated, particularly in the context of rapid AI advancements, emphasizing the need for investors to have a clear understanding of their holdings to avoid potential risks and losses.
- Investment Scale and Returns: Last year, Apollo originated $310 billion in new investments, with 80% being investment-grade financing, serving major clients like Intel, BP, and Shell, indicating a robust investment strategy in a high-risk market.
- Role of Tech Companies in Debt Market: Rowan noted that the influence of technology companies in the debt market will continue to grow, predicting that in the next five years, major issuers of investment-grade debt will be dominated by large tech firms and banks, reflecting significant structural changes in the market.
See More
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- Market Recovery: In late morning trading on Thursday, all three major US stock indices showed gains, reflecting investor optimism about market prospects, although specific gains were not disclosed.
- Improved Investor Sentiment: Influenced by economic data and corporate earnings, investor confidence has rebounded, driving the stock market higher and indicating expectations for future economic growth.
- Increased Trading Activity: As indices rise, market trading activity has noticeably increased, suggesting a positive response from investors to the current market environment, potentially signaling broader investment trends.
- Economic Data Impact: While specific data was not provided, heightened attention to upcoming economic indicators and corporate earnings reports may further influence index movements.
See More
