Amazon shares closed up 15.32% on Friday, the biggest one-day jump since April 2012, after the company reported accelerating cloud-computing revenue at AWS, according to Spencer Soper of Bloomberg. The report said the results eased investors' concerns.
Behind the move is a story about infrastructure. Tech Times reports that AWS's backlog — the contracted work it has yet to deliver — has reached $496 billion, that Amazon has raised its AI spending plan to $220 billion, and that the company is running short on capacity. In plain terms: customers want more computing power than Amazon currently has to sell, and Amazon is spending enormous sums to close that gap.
The other piece is silicon. Amazon says its custom chip business has exceeded a $25 billion annual revenue run rate, describing in its own account how it became one of the world's top chip companies in roughly a decade. The Tech Buzz frames that $25 billion figure as beginning to rival Nvidia's dominance in AI chips. Designing its own chips lets Amazon lean less on outside suppliers for the hardware that trains and runs AI models.
Wall Street is taking notice. Mizuho called Amazon's AI story a "game changer," according to Bloomberg.
A caution worth keeping in view: a backlog is future revenue, not booked revenue, and enormous capital spending is a bet that demand holds up long enough to pay for the data centers being built now.
Why it matters: the biggest cloud provider is committing hundreds of billions of dollars and its own chip designs to AI, and investors just rewarded that bet with Amazon's best day in more than a decade — a signal about who controls the plumbing that the entire AI industry rents.