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Amazon has revealed plans to pour $50 billion into artificial intelligence and supercomputing infrastructure across the United States.
Markets are enjoying a broad-based rally, with Bitcoin climbing back above $87,000 and the Nasdaq jumping over 2%.
Bitcoin mining companies—many of which have pivoted their operations toward AI and high-performance computing—are posting double-digit gains in several instances.
The sharp sell-off that hit markets last week, especially in crypto, appears to be reversing at least temporarily on Monday, as investors welcome Amazon’s (AMZN) announcement of up to $50 billion in new spending to bolster AI and supercomputing capabilities for the U.S. government.
The positive sentiment has lifted the Nasdaq 2.3% and the S&P 500 1.4% as of midday on the East Coast.
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Amazon’s aggressive investment in artificial intelligence has yet to win over Wall Street. Despite the AI buzz lifting stocks across the tech sector, Amazon shares are up just 3% in 2025 — trailing the S&P 500’s 7% gain and lagging far behind Meta’s 20% surge.
While AI has created clear winners this year, Amazon appears stuck in the middle. Earlier concerns about cheap Chinese AI models flooding the market briefly dragged stocks down, but sentiment has since recovered. Microsoft, Meta, and Nvidia have powered the S&P 500’s growth, while slower movers like Apple have stumbled.
So why hasn’t Amazon’s AI strategy impressed investors?
According to Janus Henderson portfolio manager Brian Recht, the market isn’t yet pricing in Amazon’s AI potential. “Investors want to see whether Amazon can actually deliver improved profitability,” he says. “But we think that evidence will become clearer quarter by quarter.”
Cloud Thrives, Retail Struggles
Amazon's diverse portfolio — spanning cloud computing, advertising, and retail — typically helps balance the business. But in 2025, tariffs are weighing heavily on its core e-commerce arm, which still generates the bulk of revenue.
Meanwhile, Amazon Web Services (AWS) remains the crown jewel. Demand is surging as companies race to train and run AI models in the cloud. That spotlight on AWS has left Amazon’s struggling online shopping unit in the background — but management says AI could drive major gains across both.
AI is already being integrated to optimize advertising, personalize shopping recommendations, and streamline warehouse logistics. Amazon’s new AI-powered shopping assistant “Rufus” helps users compare prices, read review summaries, and make better buying decisions.
Big Spending, Bigger Expectations
All eyes are on Amazon’s Q2 results, set for July 31. Analysts expect earnings of $1.32 per share on revenue of $162 billion — up 4% and 9% year over year, respectively. By comparison, the broader "Magnificent Seven" group of tech giants is forecast to post 15% profit growth on 12% revenue gains.
Amazon is pouring money into its future. With capital spending projected to hit $104 billion this year — the highest in the S&P 500 — the company is making massive bets on AI infrastructure, including $30 billion dedicated to new data centers in Pennsylvania and North Carolina.
The company is also trimming headcount, especially in cloud, as it doubles down on automation and efficiency. CEO Andy Jassy has signaled a leaner future, where AI reduces repetitive labor and boosts productivity.
Robots & Retail: A Hidden Edge?
In June, Amazon reportedly began testing humanoid robots designed to navigate warehouse obstacle courses. According to Bank of America, this kind of automation could save the company over $7 billion annually by 2032.
Morgan Stanley analysts recently called Amazon’s retail division “the most underappreciated GenAI beneficiary” in the tech space. BCA Research strategist Irene Tunkel agrees, noting that AI and robotics can meaningfully enhance warehouse productivity and protect razor-thin retail margins. She sees the payoff unfolding over the next 5 to 10 years — and believes Amazon’s early investment gives it a competitive edge.
Whether the market recognizes that lead could hinge on the company’s upcoming earnings report.
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