Amazon.com Inc. (NASDAQ:AMZN) stock rose on Thursday as investors returned to mega-cap technology stocks and reacted to a report that the company is exploring sales of its custom artificial intelligence chips outside Amazon Web Services.



The Nasdaq Composite gained 2.3%, while the S&amp;P 500 advanced 0.8%.



<h2>AI Chip Expansion Adds Fresh Catalyst</h2>



Amazon’s gains came as investors embraced a broader risk-on trade. Technology stocks led the market with a 2.9% advance, while seven of the 11 S&amp;P 500 sectors traded higher.



The rally also followed a Bloomberg report that Amazon is in talks to sell its custom Trainium AI chips for deployment in third-party data centers. The move would expand the company’s effort to compete with NVIDIA Corp. (NASDAQ:NVDA) in the AI infrastructure market.



Amazon AI chief Peter DeSantis told Bloomberg the company has started discussions with potential customers but declined to identify them.



“We view AI infrastructure as rapidly evolving,” DeSantis said. “And we’re constantly looking at ways to get to more customers.”



According to Bloomberg, demand for sovereign AI infrastructure is growing, particularly outside the United States. DeSantis said Amazon Web Services has not been affected by Europe’s efforts to reduce its dependence on U.S. technology.



He added that Amazon’s third-generation Trainium chips are “largely sold out,” while customer interest is already building for the fourth-generation chips expected next year.



DeSantis also said selling Trainium chips outside AWS would not hurt Amazon’s cloud business because “there’s so much underconsumption in AI.”



Trainium chips are already available through AWS and are used by customers including OpenAI, Anthropic, and Uber Technologies, Bloomberg reported.



<h2>Amazon Technical Picture Remains Mixed</h2>



Amazon’s longer-term trend remains constructive, although short-term technical signals remain mixed.



The stock is trading about 4.8% above its 200-day simple moving average and 3.6% above its 100-day moving average. However, it remains 4.1% below its 20-day moving average and 5% below its 50-day moving average, suggesting it is still recovering from its recent pullback.



Momentum indicators also remain cautious. The moving average convergence divergence indicator is below its signal line, while the histogram remains negative, indicating bullish momentum has weakened.



The moving averages also present a mixed picture. The 20-day moving average remains below the 50-day moving average, a short-term bearish signal. However, the 50-day moving average remains above the 200-day moving average following the golden cross formed in May, supporting the longer-term uptrend.



Technical analysts are watching resistance near $275, close to the stock’s 52-week high of $278.56. Initial support is around $226.50.



<h2>Earnings And Analyst Outlook</h2>



Amazon is expected to report second-quarter results on July 30.



Wall Street expects earnings of $1.81 per share, up from $1.68 a year earlier. Revenue is projected to increase to $196.03 billion from $167.70 billion.



The stock carries a consensus Buy rating with an average analyst price forecast of $320.86. Recent analyst actions include:



<ul>
<li>Truist Securities raised its price forecast to $320 from $290 while maintaining a Buy rating on May 29.</li>



<li>Wells Fargo lowered its price forecast to $312 from $315 and maintained its Overweight rating on May 20.</li>



<li>TD Cowen maintained its Buy rating and $350 price forecast on May 12.</li>
</ul>



<h2>Amazon Benzinga Edge Rankings</h2>



According to Benzinga Edge, Amazon has a Growth score of 95.61, reflecting strong long-term growth expectations.



Its Momentum score is 54.13, and its Quality score is 52.86, suggesting solid fundamentals but more moderate near-term momentum.



<h2>ETF Exposure</h2>



Amazon is one of the largest holdings in several growth-focused exchange-traded funds, including the American Century Focused Dynamic Growth ETF (NYSE:FDG), the Franklin Focused Growth ETF (NASDAQ:FFOG), and the Direxion Daily Magnificent 7 Bull 2X Shares ETF (NYSE:QQQU). Large inflows or outflows from these funds can influence demand for Amazon shares.



<h2>Amazon Price Action</h2>



AMZN Stock Price Activity: Amazon.com shares were up 2.55% at $243.56 at the time of publication on Thursday, according to Benzinga Pro data.



Photo via Shutterstock



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Read Also:

Google Unveils New AI Super-Chips To Slash Costs, Rival Nvidia



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Amazon stock rose as the company explores selling its custom Trainium AI chips outside AWS to compete with NVIDIA. Amazon AI chief Peter DeSantis confirmed discussions with potential customers for third-party data centers, noting that third-generation chips are largely sold out and interest in fourth-gen chips is growing. This expansion aims to capture sovereign AI infrastructure demand without harming cloud business due to underconsumption. Meanwhile, technical indicators show mixed signals, and analysts maintain a consensus Buy rating ahead of Q2 earnings.

- Amazon.com Inc. stock rose as investors favored mega-cap technology stocks and after a report about its potential sale of custom AI chips outside AWS.  
- The Nasdaq Composite and S&P 500 also saw gains, reflecting a broader market rally, with Amazon reportedly in talks to compete more aggressively in the AI infrastructure market.  
- Amazon's upcoming earnings report is expected to show an increase in revenue and earnings, while analysts maintain a consensus Buy rating with various price forecasts from $312 to $350.

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Amazon Expands Trainium AI Chip Strategy Beyond AWS