<p>Skeptics have grown increasingly concerned about a potential bubble in artificial intelligence (AI) stocks. Those fears are overblown, according to <strong>Amazon</strong> <span class="ticker-mention inline-flex items-center font-bold">(AMZN <span class="ml-1 text-green-900">+2.05%</span>)</span> CEO Andy Jassy.</p>
<p>In a letter to shareholders, Jassy explained why he's excited about the cloud computing titan's AI-driven future. Investors took notice, driving Amazon's shares up nearly 14% this week.</p>
<p>Yet this AI-fueled rally might just be getting started. Some of the reasons Jassy gave for his optimism also help to explain why Amazon's stock is still an excellent buy today.</p>
<div><img alt="Amazon's logo is superimposed on one of its delivery vehicles. " width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NjUxNjYvYW16bi5wbmcmdz0zODQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NjUxNjYvYW16bi5wbmcmdz0zODQw"/>
<p>Image source: The Motley Fool.</p>
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<h2>1. &#34;We have never seen a technology more quickly adopted than AI.&#34;</h2>
<p>Jassy likened AI's future impact to that of electricity, which reorganized &#34;every factory, home, and industry on Earth.&#34;</p><div><div id="foolcom_sidebar_top_container"></div></div>
<p>Yet he noted that while electricity took 40 years to have these effects, AI is &#34;moving ten times faster.&#34;</p><div></div>
<p>&#34;Every customer experience will be reinvented by AI, and there will be a slew of new experiences only possible because of AI,&#34; Jassy said.</p><div><div id="in_line_article_pitch_container"></div></div>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Amazon Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FNWk4ucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FNWk4ucG5nJnc9MTI4"/></div><div><h2>NASDAQ: AMZN</h2><div>Amazon</div></div></div><div><div><div>Today's Change</div><div>(2.05%) $4.78</div><div>Current Price</div><div>$238.43</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$2.5T</div><div>Day's Range</div><div>$235.20 - $240.43</div><div>52wk Range</div><div>$165.28 - $258.60</div><div>Volume</div><div>3M</div><div>Avg Vol</div><div>51M</div><div>Gross Margin</div><div>50.29%</div></div></div></div></section>
<h2>2. &#34;Amazon is smack in the middle of this land rush, and companies are choosing AWS for AI.&#34;</h2>
<p>Jassy noted that Amazon Web Services' AI revenue run rate was already more than $15 billion in the first quarter and growing rapidly. He also said that AWS would be expanding even faster if it were not for capacity constraints the company is working to resolve.</p>
<p>Jassy gave several reasons for AWS' AI success. He highlighted Amazon's broad suite of model- and agent-building tools, highly regarded cybersecurity, and low-cost inference offerings. Jassy also explained that AWS enables its customers to connect their AI and non-AI applications in a way that helps to reduce latency and improve performance.</p>
<h2>3. &#34;We have customer commitments that make our capex investments predictable.&#34;<strong> </strong></h2>
<p>Many investors were shocked when the e-commerce giant announced planned capital expenditures of roughly $200 billion for 2026. That's a big number, even for the mighty Amazon.</p>
<p>Yet Jassy was clear that he wasn't spending this money &#34;on a hunch.&#34; Instead, he noted that Amazon already has commitments from its cloud computing clients for a substantial portion of the capacity AWS will be bringing online.</p>
<p>Additionally, Jassy expects Amazon to generate &#34;attractive&#34; returns on capital and free cash flow from these investments within &#34;a couple of years after being in service.&#34;</p>
<p>&#34;We're investing to be the meaningful leader [in AI], and our future business, operating income, and FCF will be much larger because of it,&#34; Jassy said.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

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<p>Amazon's stock surged nearly 14% this week, driven by CEO Andy Jassy's optimistic outlook on AI. He emphasized AI's rapid adoption, likening its impact to electricity, and highlighted Amazon Web Services' (AWS) growing AI revenue, projected at over $15 billion. Jassy also addressed a planned $200 billion capital expenditure for 2026, backed by customer commitments, ensuring predictable returns. He believes these investments will solidify Amazon's leadership in AI and significantly enhance future operating income and free cash flow.</p>

- Amazon CEO Andy Jassy addressed concerns about a potential bubble in AI stocks, emphasizing the rapid adoption of AI technology.  
- He highlighted Amazon Web Services' (AWS) significant AI revenue, projecting over $15 billion annually and explained that investments will be supported by committed customer contracts.  
- Jassy believes these investments will lead to substantial returns and positions Amazon as a leader in the AI space, driving future business growth.

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Amazon Stock Just Saw Its Biggest Surge in Months. Here Are 3 Reasons AMZN Is a Great Buy Right Now