Amazon (AMZN) shares ripped higher on Thursday after CEO Andy Jassy said the company could start selling artificial intelligence (AI) chips directly to third parties.
Adding to momentum on April 9 was Amazon's $25 billion commitment to data center expansion in Mississippi. The U.S.-Iran ceasefire, which triggered a broader market rally, is also a contributing factor.
Together, these announcements helped Amazon stock break above its major moving averages (100-day and 200-day), signaling that longer-term momentum may now be shifting back to bullish.
Note that this “Magnificent 7” name is still down about 6% versus its year-to-date high.
What an AI Chips Business Could Mean for Amazon Stock
For years, Amazon’s custom silicon business — its Trainium AI accelerators and Graviton CPUs — was an internal cost-saver, existing solely to make AWS cheaper to run.
But Jassy’s revelation in the annual shareholder letter this morning changed that narrative entirely, prompting a 5% rally in AMZN shares.
According to Jassy, the chip business already generates over $20 billion in annual revenue — growing at triple-digit rates — but its true value may be closer to $50 billion if chips were sold as a standalone product.
With Trainium2 completely sold out and Trainium3 nearly fully subscribed, even though it began shipping only a few weeks ago, demand is clearly outstripping supply.
If Amazon follows through on selling chip racks directly to outside customers, it opens an entirely new revenue stream — one that will put it in head-on competition with Nvidia (NVDA) and Advanced Micro Devices (AMD) for the fast-growing artificial intelligence infrastructure market.
Why the Mississippi Announcement Is Significant for AMZN Shares
AMZN’s commitment to growing its data center footprint in Mississippi to a total of $25 billion also warrants a closer look.
This build-out, featuring a new $11 billion expansion in Madison County and a $1 billion conversion of a former Delphi facility, will create more than 2,000 high-skilled jobs.
For Amazon shares, this isn’t just a headline; it’s a direct signal that AWS capacity is being scaled to meet AI demand that Jassy himself described as “capacity-constrained.”
AWS’s artificial intelligence revenue also runs at a $15 billion annual rate as of early 2026, with plans of nearly doubling compute capacity by next year.
More infrastructure would improve the giant’s ability to serve more customers, lead to more chip utilization, and ultimately, produce higher AWS margins.
Wall Street Remains Constructive on Amazon
While AMZN stock hasn’t been particularly exciting since the start of 2026, Wall Street remains bullish on it for the long term.
The consensus rating on Amazon currently sits at a “Strong Buy,” with the mean price target of about $286 indicating potential upside of nearly 23% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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