Shares of e-commerce and cloud computing giant Amazon (AMZN) rose as much as 5.7% on Thursday before settling back to a 4.2% gain. While several AI-related stocks moved higher on the day, Amazon’s additional gains were largely driven by CEO Andy Jassy’s annual shareholder letter.
Amazon’s stock had been under some pressure since the company announced plans for roughly $200 billion in capital expenditures this year, primarily directed toward AI data centers. However, in his letter, Jassy reaffirmed confidence in the AI business. He noted that Amazon Web Services (AWS) generated only $58 million in revenue three years after its launch, whereas Amazon’s AI business—just over three years after ChatGPT’s debut—has already reached an annualized revenue of $15 billion and is growing rapidly.
Jassy revealed that Amazon’s in-house Trainium3 AI chips, which shipped last month, are already fully booked, and a “significant portion” of Trainium4—still 18 months away from shipping—has already been pre-ordered by major customers. The company’s in-house CPU chip, Graviton, is also sold out, with two large AWS customers requesting to reserve all of Amazon’s Graviton capacity for the year. Jassy stated that if Amazon’s chip business were a standalone company, it would generate $20 billion in revenue; if it sold to third parties like a typical chipmaker, it could generate $50 billion in revenue.
The shareholder letter specifically highlighted that AWS’s flagship inference service, Amazon Bedrock, now runs the majority of its inference workloads on Trainium, with demand remaining strong. Jassy also indicated that Amazon may not rule out selling Trainium chip racks to third-party customers in the future.
Jassy has now been CEO of Amazon for nearly five years. In this year’s letter, he emphasized the growth potential of the chip business, reflecting Amazon’s deeper strategic ambitions in cloud computing and AI infrastructure.
Jassy also devoted significant space in the letter to Amazon’s robotics and satellite broadband businesses, which will compete with Tesla’s Optimus robot and SpaceX’s Starlink service. He stressed that Amazon has a 14-year head start in warehouse robotics. Additionally, the company’s newly launched satellite broadband service, Amazon Leo, will offer upload speeds six to eight times faster than current alternatives and download speeds twice as fast. While not naming names, the letter clearly targets Elon Musk’s robotics and space ventures.
Although Amazon’s stock has been under pressure in 2026 due to trade war concerns and massive capital expenditure plans, Jassy’s letter suggests those worries may be overdone. Even after Thursday’s gains, Amazon trades at a price-to-earnings ratio of about 28 times this year’s expected earnings—a valuation that remains low for a company with such a strong leadership position in AI computing.
