At the time of writing, as of Friday afternoon, March 6, according to Yahoo Finance, Amazon stock has lost about 7% year to date. Meanwhile, the SPDR S&P 500 Index ( SPY ) is down a little less than 1% over the same period.
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Alphabet ( GOOGL ) is down nearly 5%.
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Microsoft ( MSFT ) is down 15%.
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Apple ( AAPL ) is down more than 5%.
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Nvidia ( NVDA ) is down nearly 3%.
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Tesla ( TSLA ) is down 11%.
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META is down 2%.
Fears of an AI bubble and ridiculous capex spending plans have sunk many AI-heavy stocks, dragging the S&P 500 lower. I explained how the AI bubble works in my article “AMZN, MSFT, NVDA, SFTBY Burn $100 Billion.”
Since the article was published, we have learned about the outcome. Microsoft did not invest. OpenAI called the $110 billion funding round a success, even though not all of the money is guaranteed.
Amazon has pledged $50 billion, starting with $15 billion.
If we look at the Form 8-K, it indicates: “Amazon Sub is obligated to purchase all outstanding shares of the pledge prior to (i) meeting the objectives of the OpenAI meeting, and (ii) OpenAI directly or indirectly spending the initial public offering or direct listing of equity securities in the United States, (the subject of the transaction and the subject of the “Puba) in each of the special conditions.
Interestingly, according to the information sources, the “defined milestones” mean the arrival of Artificial General Intelligence (AGI).
If the resources are correct, this creates problems for OpenAI. I’m pretty sure their ChatGPT will never shape into AGI, not that the term is well defined anyway. But you don’t have to believe me. You should listen to Yan Likun, one of the four “Godfathers” of AI.
Here’s what he had to say on the Big Tech Podcast, hosted by Alex Kanterwitz.
When we also consider the second clause, which concerns the IPO and is faced with major obstacles, given the current value of the company, we can conclude that an investment of more than $15 billion from Amazon is highly unlikely.
As part of the deal, OpenAI and Amazon Web Services (AWS) have expanded their existing $38 billion agreement to $100 billion over eight years. OpenAI has committed to deploying approximately 2 GW of Trinnium capacity through AWS infrastructure.
Another important customer of AWS is Entropy.
Bloomberg reported that Anthropic’s annual revenue driving rate (ARR) has exceeded $19 billion, and will reach $9 billion by the end of 2025.
Following the publication of the Bloomberg report, Bank of America analysts Justin Post and Steven McDermott updated their views on Amazon stock.
Analysts said the recent acceleration in Anthropic’s ARR and the new capacity agreement with OpenAI signal strong enterprise demand for AI services, which should continue to support rapid AWS backlog growth.
Other Technical Storage:
Post believes, as Anthropic’s ARR growth indicates a $2.5 billion or larger QoQ revenue increase.
He said that if we assume that a significant portion of Anthropic’s workload runs on AWS, and that AWS will receive half of Anthropic’s estimated $12 billion in training costs in the 2026 model (according to Forbes), this would give an increase of nearly $1 billion QoQ in Q1 AWS revenue from Anthropic.
Analysts noted that concerns that higher incomes will spur even more investment are likely to persist. However, they believe that AWS can earn additional capacity at a higher rate than Wall Street consensus estimates, providing more confidence in the near-term capex return on investment.
In a research note shared with me, Post reiterated a Buy rating and a $275 target price.
Related: Apple’s latest product is a game changer
The target price is based on an analysis of the sum of its components that values AWS at 8x 2027 sales, first-party retail at 1.0x, third-party retail at 2.5x, and advertising at 5.0x. Post’s price target is based on a blended price-to-sales ratio of 3.3 times, 12 times 2027 EBITDA, and 29 times 2027 EPS.
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Increased competition from offline and local retailers
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AWS Customer Cost Optimization Impacts Revenues and Margins
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Regulatory pressure on the third-party market
They also noted that the stock has experienced high volatility in the past based on margin trends, and that volatility could increase due to economic uncertainty.
With the theme of capex spending being the main focus for the company this year, we can see Amazon successfully implementing its plans.
AWS has announced the availability of Amazon EC2 I8ge instances in the Europe (Ireland) AWS Region.
According to the company, these new instances are powered by 5th generation Intel Xeon Scalable processors with a 3.2 GHz all-core turbo frequency, offering up to 40% better compute performance and 20% better price performance than current i3en instances.
The i8ge instances offer up to 120TB of local NVMe storage density and feature twice as many vCPUs and memory as previous generation instances.
The company says these instances, powered by third-generation AWS Nitro SSDs, achieve up to 65% better real-time storage performance, up to 50% lower storage I/O latency, and 65% lower storage I/O latency variability than I3en instances.
Ideal instances for high-density storage, such as I8ge, are for workloads that demand high random read/write performance and fast local storage with consistently low latency for accessing large datasets.
Related: 5-star analyst resets Broadcom price target ahead of earnings
This story was originally published by The Street on March 8, 2026, where it first appeared in the Investing section. Add TheStreet as a Favorite Source by clicking here.
