Harry Jones
5 min read
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Investing.com — Big Tech has spent the past month under the cosh as investors punish multi-billion-dollar artificial intelligence infrastructure budgets, sending NVIDIA (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), and Microsoft (NASDAQ:MSFT) down 23.2%, 15.4%, and 3.7%, respectively, over the past 30 days.
Yet Amazon.com (NASDAQ:AMZN)—the e-commerce and cloud giant at the center of the Anthropic boom—has pulled away from the group, gaining 10.74% since November 1 to trade near $266.17.
The market is pricing Amazon’s spending like its peers’ speculative budgets, and the backlog says that is the wrong comparison. Yet Amazon is building against contracted demand: Amazon Web Services (AWS) carries a $578 billion backlog, and Anthropic has committed at least $110 billion in cloud spend with Amazon through 2036. At 21.4 times trailing earnings, the market still values that franchise below legacy brick-and-mortar retailers Walmart (45.2x) and Costco (52.2x).
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Monetizing AI From the Data Center to the Checkout
Amazon’s moat is cost on both sides of the business: its own chips lower what AI customers pay AWS, and its robots lower what each order costs to deliver. AWS captures frontier AI demand through its own Trainium chips and the Bedrock inference service rather than relying solely on third-party GPU markups, and its custom silicon saved customers more than $2 billion in the third quarter alone. On the retail side, more than 1 million robots across the fulfillment network have cut cost-to-serve for the fourth consecutive year, while advertising adds a high-margin layer on top of every transaction.
Third-quarter results confirmed that the AI demand is real and accelerating. AWS revenue climbed 39.3% year-over-year to $46 billion, its sixth consecutive quarter of acceleration, on a 38.7% operating margin. Group revenue rose 12% to $201.9 billion, while operating income surged 61% to $28.1 billion for a record 13.9% operating margin. Advertising revenue grew 12% to $19.6 billion despite a Prime Day timing shift, and management expects a return to high-teens growth in the fourth quarter.
