Amazon’s AI Spending: Not a Frightful Pickle!

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Now, investors – a rather fidgety bunch, aren’t they? – have been awfully keen on these ‘artificial intelligence’ contraptions for a few years. But recently, a bit of a wobble has set in. They’re starting to fret about spending, you see. The worry is that these cloud companies, like enormous, greedy giants, might build far too much ‘capacity’ – which is just a fancy word for ‘stuff’ – and then be left with mountains of it, costing a fortune, if the demand for these gizmos suddenly dries up. A truly ghastly thought.

This little panic, along with the rather inflated prices of many ‘growth’ stocks (a bit like blowing up a balloon until it’s about to pop), has given the AI market a bit of a shiver every now and then. We had a dip back in November, if you recall. So, it wasn’t terribly surprising that when Amazon (AMZN 5.49%) announced plans to splash out a whopping $200 billion by 2026 – a sum that could buy a small country, mind you – to cater to this AI business, the stock took a bit of a tumble before anyone could say ‘Bob’s your uncle.’

But if you’re feeling a bit jittery about Amazon’s spending, allow me to share nine little words from the big boss, Andy Jassy. They might just put your mind at ease – and even encourage you to snatch up a few Amazon shares while the price is still reasonable.

How Amazon Fits Into the AI Story

First, let’s have a quick peek at what Amazon actually does in this whole AI business. Most folks know them for delivering parcels and selling practically everything under the sun, but they’re also rather clever chaps when it comes to ‘cloud computing.’ In fact, Amazon Web Services (AWS) is the biggest, most booming cloud in the sky. Customers flock to AWS for all sorts of things, but this AI business has given it a tremendous boost.

AWS offers everything an AI enthusiast could possibly desire: from its own specially-made chips – rather economical, you see – to the top-of-the-line chips from a company called Nvidia. They even sell access to a rather cunning service, Amazon Bedrock, which allows customers to tinker with these ‘large language models’ and make them do exactly what they want. A bit like training a mischievous parrot, really.

All this has caused AWS to grow at a tremendous rate. In the last quarter, Amazon reported an annual revenue run rate of $142 billion for AWS. That’s the strongest growth they’ve seen in 13 quarters – a truly spectacular performance!

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Jassy’s Reassuring Words

Now, let’s get to Jassy’s words. He said, “Customers really want AWS for core and AI workloads.”

The fact that customers are turning to AWS for both ordinary tasks and AI projects suggests that even if this AI craze loses steam, Amazon can still keep growing. That should ease your mind if you’re worried about a slowdown. It’s a bit like having a spare umbrella on a rainy day – always good to be prepared.

On top of that, Jassy mentioned that as they add new ‘capacity’ – more of that ‘stuff’ – they’re making money from it immediately. This should reassure investors as Amazon begins this new wave of spending. It shows they aren’t entirely reliant on AI and are quickly getting a return on their investments. A rather clever trick, wouldn’t you say?

All of this makes Amazon a splendid stock to own, whether this AI boom continues to gather momentum or decides to take a little nap. It’s a solid, dependable sort of company, like a trusty old boot. And who doesn’t love a good, reliable boot?

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2026-02-09 02:12