Amazon Shares Hit Record High as AI and Cloud Revenue Surge
First-quarter results show AWS growth accelerating to 28 per cent and custom silicon demand outstripping supply, underpinning the tech giant’s valuation near $278.56.
Amazon shares recently touched an all-time high of $278.56, extending a rally that has seen the stock climb more than 30 per cent over the past three months. The momentum follows a robust first-quarter performance, with the company reporting $181.5 billion in revenue, a 17 per cent increase year-on-year. Investors are responding to the company’s expanding footprint in cloud computing, artificial intelligence, and advertising, sectors that analysts believe support further upside despite the stock’s elevated valuation.
Amazon Web Services (AWS) emerged as a primary driver of this growth, delivering $37.6 billion in revenue with sales accelerating to 28 per cent year-on-year. This marks the highest growth rate for the cloud division in 15 quarters, reflecting a broader enterprise shift from on-premises infrastructure to the cloud. Management highlighted a strong correlation between artificial intelligence spending and core AWS growth, noting that AI-related revenue is expanding at a triple-digit pace. Consequently, AWS has reached an annualised revenue run rate of approximately $150 billion.
Beyond traditional cloud services, Amazon’s custom silicon business has become a significant catalyst. The chip division, which includes the Trainium and Graviton lines, reported a 40 per cent quarter-on-quarter sales increase, exceeding a $20 billion annual revenue run rate. Amazon disclosed more than $225 billion in revenue commitments tied to Trainium products through multiyear agreements with leading artificial intelligence companies. Demand remains exceptionally tight, with Trainium2 chips largely sold out and Trainium3 capacity nearly fully subscribed ahead of its 2026 shipping schedule.
The company’s advertising segment also contributed to the strong financial results, with revenue rising 22 per cent year-on-year to $17.2 billion. This high-margin business continues to benefit from expanded partnerships with major media platforms. Simultaneously, Amazon is improving its core e-commerce operations through increased automation and faster delivery speeds, aiming to boost customer satisfaction and profitability across its global fulfilment network.
Despite the positive top-line growth, Amazon’s aggressive investment strategy presents a near-term challenge. Capital expenditures reached $43.2 billion in the first quarter as the company builds data centre capacity and semiconductor development capabilities. This heavy spending is expected to pressure margins in the short term, with analysts forecasting earnings per share of $7.71 in 2026, representing a deceleration from the 30 per cent growth seen in 2025. Nevertheless, Wall Street maintains a Strong Buy recommendation, citing the long-term potential of Amazon’s diversified growth engines.
