$Amazon(AMZN.US)

Context: From a technical perspective, the stock is trading above the trendline support of $245 but remains below the resistance at $260. From a fundamental perspective, the recent positive developments regarding the growth of the company’s cloud business, as well as improvements in the company’s advertising business and retail business, warrant the positive move in the stock. The biggest risk to the company is likely its high capital expenditures. Management has recently disclosed that the company expects approximately $220 billion of cash capital expenditures in 2026, while the company’s free cash flow has recently been negative.

My Trade: Not holding a big size in Amazon, but happy to add if it drops back to $230. Year end price target would be for it to stabilise at $260-$270.

Takeaway: The long-term supply agreement with Generac illustrates the level of competitive AI and edge computing resources required. While many companies have announced AI strategies, the means to implement and bring the strategies to market may not be available. Amazon does. Amazon recently entered a multi-year agreement with Generac to build out Amazon’s AI infrastructure. Under this agreement, Generac expects to receive approximately $2.4 billion from Amazon in 2027 and 2028 for the purchase of backup power generators. The Generac deal demonstrates that Amazon is preparing the physical infrastructure required to support the AI work already committed by customers. @Captain's Treasure