Amazon

Shortages continue for TSMC’s top production processes, 3nm and 2nm, and CoWoS advanced packaging, media report, mostly locked up by Nvidia and Apple. Amazon AWS has won more 3nm capacity recently, while MediaTek continues to seek more 2nm/3nm capacity and CoWoS-S/L packaging for smartphone chips and Google TPUs.

Source: Dan Nystedt

Context

Amazon.com, Inc. (AMZN) is transforming from an e-commerce giant into a high-margin AI and cloud infrastructure powerhouse .

- AWS Acceleration: Amazon Web Services (AWS) drives the thesis, with enterprise AI adoption fueling surging revenues. Crucially, cloud revenue growth is now outpacing heavy AI capital expenditures, unlocking massive free cash flow.

- The Ad Engine: Amazon’s high-margin digital advertising business acts as a silent margin multiplier, offsetting the lower-margin retail divisions.

- Technical Setup: The stock is consolidating in a wide monthly range (~$249–$267). While Wall Street remains heavily bullish, this sideways price action offers an accumulation window.

My trade

Strategy: A 70/30 Long Equity and Options Overlay to build a position during consolidation. Deploy 70% of capital into core equity at the current midpoint (~$255). Allocate 30% of capital to sell Cash-Secured Puts at a $248 strike, targeting strong structural support at the bottom of the range.

Takeaway

The Valuation Trap: Evaluating Amazon on a simple consolidated P/E ratio is a mistake. A Sum-of-the-Parts (SOTP) model reveals its true value: separating the premium cloud and high-margin ad businesses from legacy retail shows a stock that is deeply undervalued relative to its forward cash generation.

Bottom Line: Accumulating AMZN during sideways consolidation remains a high-conviction play as its operational efficiency flywheel gains momentum.

A "bombshell" just dropped as Anthropic CEO Dario Amodei, backed by leaders like Sam Altman and Elon Musk, called for the deliberate slowdown ("pacing" but not halting) in launching next-generation frontier AI models. This is supposed to give safety testing, evaluation frameworks, and alignment research enough time to keep pace as AI systems move toward autonomous capability thresholds.

As chipmakers serve as the primary proxy bet on AI expansion, the call to "pump the brakes" created an immediate sentiment and valuation shock:

* Sell-Off & Support Levels: $NVIDIA(NVDA.US) shares experienced an immediate pullback of ~3.5% to 8%, testing near-term support levels around $210–$212.

* Capex Growth Expectations: Nvidia’s valuation relies heavily on cloud hyperscalers (Microsoft, Meta, Google, Amazon) making continuous multi-billion-dollar investments in GPU clusters. "Pacing" means slower model iterations, signalling potential delays or moderation in near-term hardware orders.

But I think this is an expectations recalibration rather than a fundamental demand collapse, since enterprise inference workloads and current model deployments should still remain active.

As such, I'm holding on to my $NVIDIA(NVDA.US)shares and will add when it hits by accumulation level.

Morgan Stanley has CapEx of CSPs ~12% in 2028, with spending on AI semiconductors expected to increase even more.

The Productivity Paradox J-Curve.

Amazon and Taiwan’s Wiwynn will invest US$1.6 billion to expand Wiwynn’s AI server plant in Texas to strengthen its supply chain and boost AI server output, media report. The US will account for 20% of Wiwynn’s global output next year, compared to current capacity: 70% in Mexico, 20% in Malaysia and 10% in Europe.

Source: Dan Nystedt

Gained over 8%

strong counter

It will still be on a rise in the long term. Add on!