Should You Buy Amazon After Its Deal With OpenAI?

Core Insights - Amazon has established itself as a significant player in the artificial intelligence (AI) sector, in addition to its e-commerce dominance [1] - OpenAI has signed a $38 billion deal with Amazon's cloud business, marking the first direct contract between the two companies, which is a positive signal for Amazon's position in the AI market [2] Amazon's Cloud Business - Amazon Web Services (AWS) is the leading cloud services provider globally, offering a wide range of AI products and services, including its proprietary Trainium AI chip and a fully managed AI service called Amazon Bedrock [4] - AWS reported a 20% increase in revenue in the third quarter, with an annual revenue run rate reaching $132 billion, driven by its focus on AI [5] - The company has invested over $89 billion this year to expand its data centers to meet the growing demand from AI customers, indicating a strong belief in AI as a long-term growth opportunity [5] Profit Drivers - AWS is the primary profit driver for Amazon, contributing over $11 billion in operating income in the recent quarter, which accounts for approximately 64% of the company's total operating income [6]