Amazon Committed to Additional 2 Million Nvidia GPUs, Stock Reacts Negatively
On Wednesday, Amazon Web Services (AWS) announced a commitment to deploy an additional 2 million Nvidia GPUs by 2028. This brings the total GPU order from AWS up to over 3 million and triples its initial plan just five months ago. The move is part of AWS's efforts to meet surging demand for AI computing power, with plans also including building secure AI factories for U.S. government use. Despite this significant commitment, Amazon’s stock traded lower by about 1.5%, while Nvidia saw a nearly 9% increase following the announcement. CEO Andy Jassy highlighted that AWS is already facing capacity constraints in meeting demand and expects continued high spending beyond its current $220 billion capital budget for 2026. AWS's revenue growth has accelerated, with Q1 up 28% year-over-year to $42.2 billion in the second quarter. The segment’s backlog of signed but undelivered work reached $496 billion and is growing at a triple-digit rate annually.
