What Happened?
Shares of cloud computing and online retail behemoth Amazon (NASDAQ: AMZN) jumped 2.9% in the morning session after it announced multiple positive business developments, including a new partnership for its Project Kuiper and favorable news related to its investment in artificial intelligence startup Anthropic.
The company announced that JetBlue will be the first airline to use its Project Kuiper satellite technology for in-flight Wi-Fi service starting in 2027. This marks a significant milestone for Amazon's low Earth orbit satellite initiative. Adding to the positive sentiment, AI startup Anthropic, in which Amazon holds an estimated 15% to 19% stake, completed a new funding round that boosted its valuation to $183 billion.
Analysts see this as a major positive for Amazon, as it not only increases the value of its investment but is also expected to drive more business to its cloud division. Roth Capital Partners analysts, who maintained a "Buy" rating on the stock, noted that Anthropic could spend as much as $5 billion on Amazon Web Services (AWS) in 2026.
After the initial pop the shares cooled down to $233.92, up 3.5% from previous close.
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What Is The Market Telling Us
Amazon’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 1.9% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Amazon is up 6.2% since the beginning of the year, and at $233.92 per share, it is trading close to its 52-week high of $242.06 from February 2025. Investors who bought $1,000 worth of Amazon’s shares 5 years ago would now be looking at an investment worth $1,420.
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