What Happened?

Shares of cloud computing and online retail behemoth Amazon (NASDAQ: AMZN) jumped 2.7% in the afternoon session after renewed enthusiasm for Alphabet reinvigorated the artificial intelligence trade, propelling a market rebound heading into the Thanksgiving holiday. 

The Nasdaq index jumped 2.6% and the S&P 500 gained 1.6%, driven by a 5% rally in Alphabet following the announcement of its upgraded Gemini 3 AI model. This optimism spilled over into the broader tech sector. The rally built on momentum from the previous trading session, sparked by the New York Fed president keeping the door open for a December interest rate cut.

The shares closed the day at $226.13, up 2.5% 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 6 days ago when the stock dropped 3.4% on the news that concerns regarding lofty artificial intelligence valuations triggered a pullback in the technology sector. 

Nvidia slid ahead of its earnings report, dragging down fellow "Magnificent Seven" peers despite a major partnership announcement with Anthropic, as investors increasingly question the durability of the AI rally. Market sentiment was further dampened by Bitcoin dropping below $90,000, signaling reduced risk appetite, and growing anxiety that the Federal Reserve may pause rate cuts in December, with the implied probability of a cut falling to roughly 50%. This combination of continued de-risking and valuation skepticism put the S&P 500 on pace for its fourth consecutive daily decline. 

Separately, Rothschild & Co Redburn downgraded the stock to Neutral from Buy, citing concerns over future growth at its Amazon Web Services (AWS) division and the profitability of its artificial intelligence investments. The research firm noted that while it was previously optimistic about AWS's position in generative AI, the division had already reaccelerated as expected, leaving "limited scope for meaningful upside." The firm argued the return on investment for AI would not be like the initial "Cloud 1.0" shift. The report added that AI remained "dilutive to returns" at AWS, as the company's capital spending led to a lower return on investment than anticipated.

Amazon is up 2.8% since the beginning of the year, but at $226.37 per share, it is still trading 10.9% below its 52-week high of $254 from November 2025. Investors who bought $1,000 worth of Amazon’s shares 5 years ago would now be looking at an investment worth $1,452.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report.