Amazon (AMZN) is going all-in on artificial intelligence, planning to pour over $100 billion into AI infrastructure in 2025. The company’s CFO, Brian T. Olsavsky, mentioned that its Q4 spending of $26.3 billion indicates its future investment rate, suggesting that its yearly spending will exceed $100 billion.
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Big Tech AI Spending Spree
This bold move puts Amazon ahead of other tech giants in the AI race. However, other big tech companies are set to follow in Amazon’s footsteps. Microsoft (MSFT) is set to invest $80 billion in AI data centers, and Google’s (GOOGL) (GOOG) parent company, Alphabet, is committing $75 billion to AI and related infrastructure, including undersea cables. Meta (META) isn’t far behind, with CEO Mark Zuckerberg plans to shed $65 billion in capital expenditures, including a data center the size of a city.
Optimism All Around
Amazon’s CEO, Andy Jassy, is optimistic about the company’s AI-powered cloud business, Amazon Web Services (AWS), which raked in $28.8 billion in sales in Q4. However, he did note that growth might be uneven over the next few years due to evolving technology and uncertain capacity planning.
Amazon is deeply embedded in AI on multiple fronts. It provides cloud computing for training AI models, develops AI chips like Trainium and Inferentia, and offers AI-driven services like Bedrock and SageMaker. Plus, it’s continually improving its AI assistant, Alexa, and has introduced the Nova AI model and Rufus shopping assistant. With over $315 billion in AI infrastructure spending planned across the industry in 2025, the race for AI supremacy is heating up, and Amazon wants to lead the charge.
Is AMZN Stock a Buy, Hold or a Sell?
Turning to Wall Street, Amazon is considered a Strong Buy, based on 46 ratings. The average price target for AMZN stock is $266.95, suggesting a 16.50% upside potential.
