Amazon's chip business scores another major win

By Christine Ji

Amazon's stock jumps toward a record high, as Meta plans to use tens of millions of the company's Graviton chips for agentic AI workloads

Agentic AI workloads are increasingly shifting away from GPUs and to CPUs, according to Amazon.

Amazon.com continues to pick up artificial-intelligence momentum, with the company's chip business securing a substantial customer.

On Friday, Amazon (AMZN) entered into an agreement to provide Meta Platforms (META) with tens of millions of Graviton cores to help the social-media giant's agentic AI workloads. Graviton is Amazon's family of central processing units specialized for cloud computing.

The deal makes Meta one of the largest Graviton customers in the world.

Amazon did not disclose financial details of the deal. Amazon's stock climbed 1.9% in recent morning trading, to put it on track for its second record close in three days.

In the press release, Amazon shared that "the deal reflects a shift in how AI infrastructure gets built." While graphics processing units are optimized for training large models, CPUs are the most efficient way to power agentic AI needs such as real-time reasoning and coding, the company said.

Read: Amazon's CEO doubles down on AI spending: 'We are not going to be conservative'

As a result, companies are increasingly diversifying their hardware stack, meaning that Nvidia (NVDA) faces increasing competition. The Meta partnership is the latest endorsement for Amazon's custom silicon, which also includes Trainium and Nitro chips. In the company's annual shareholder letter earlier this month, CEO Andy Jassy said that Amazon's chips business is "on fire," with an annual revenue run rate exceeding $20 billion.

Jassy added that the chip business would lead to better economics for Amazon Web Services - an appealing proposition for investors concerned about the company's plan for $200 billion in capital expenditures this year.

Amazon's announcement comes on a day of red-hot demand for chip stocks, after Intel's (INTC) blowout earnings report sent its stock rocketing and the broader chip sector toward an 18th straight gain.

The Meta deal and other recent partnerships have lifted sentiment for Amazon Web Services ahead of Amazon's earnings report, set for April 29. Earlier this week, Anthropic committed to spending over $100 billion over the next 10 years on AWS, covering multiple generations of Trainium chips and tens of millions of Graviton cores.

Read: Amazon's stock is on its best run since 2022 as Globalstar acquisition fuels rally

-Christine Ji

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04-24-26 1050ET