Amazon (NASDAQ:AMZN) plans to invest over $100 billion in expanding its artificial intelligence (AI) infrastructure over the next decade, the Wall Street Journal reported. This marks a strategic shift in the company’s focus on growing its data centers rather than expanding its physical retail warehouses.
By expanding its data centers, AMZN aims to become the top platform for AI development. The company expects to generate tens of billions of dollars in AI revenue within the next few years.
The recent investment decision aligns with Amazon’s CEO Andy Jassy‘s vision. Jassy has been actively promoting the integration of AI products across Amazon’s business segments. He views generative AI as a potential driver of growth, enhancing the company’s strengths in online retail, Amazon Prime, and AWS.
Expanding Global AI Market
According to a research firm, Statista, the global AI market is projected to reach over $184 billion in 2024. Furthermore, the AI market is expected to exceed $826 billion by 2030.
This growth will likely be driven by the rising use of AI across various industries, better infrastructure, and more R&D investments in AI.
Thus, Amazon is expected to benefit from its AI investments by strengthening its market position and creating new growth opportunities.
Is Amazon a Buy, Sell, or Hold?
Overall, AMZN has a Strong Buy consensus rating on TipRanks based on 42 unanimous Buy recommendations. The analysts’ average price target on Amazon stock of $221.70 implies about 14.7% upside potential.
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