Amazon-OpenAI cloud deal puts an exclamation point on a remarkable few days
Amazon went from “Magnificent Seven” zero to hero in a matter of days. First, it was blowout earnings on Thursday night, followed by a 9.6% stock surge the next day. Then, on Monday, it was a big cloud deal with OpenAI, and the stock soared another 4.5%. Amazon came into last week’s earnings print as the worst-performing Mag 7 stock in 2025. Now, it is up more than 16% year to date and hitting another all-time high Monday. AMZN 5D mountain Amazon performance over 5 sessions “Amazon just completely refuted” concerns about slowing growth in its cloud unit, Amazon Web Services, Jim Cramer said Monday on ” Squawk on the Street ,” shortly after it was announced that Amazon secured a $38 billion commitment from OpenAI to use AWS cloud infrastructure for additional computer power. The partnership signals that the ChatGPT creator is no longer relying solely on Microsoft’s cloud service, Azure. Under the deal, OpenAI will immediately begin running workloads on AWS, tapping hundreds of thousands of Nvidia graphics processing units (GPUs) across U.S. data centers. It will begin with existing capacity, then expand over time, with AWS planning to build out new infrastructure specifically for OpenAI. “This deal is very exciting,” Jim said, adding that AWS is “no longer a pitiful helpless giant versus everybody else.” AWS growth went to 20% in the latest quarter from 17.5% in the prior period. “Let’s just take that growth rate even more,” predicted Jim, who has been saying for weeks that he believed in Amazon CEO Andy Jassy and was standing by the stock. Amazon emphasized their own chips, but “a lot of it is because they have so much Nvidia compute,” Jim said Monday during the Morning Meeting for Club members. AWS already owns a huge number of Nvidia chips — the specialized processors that power AI models like ChatGPT. These chips, known as GPUs, are what make it possible to train and run massive AI systems quickly. Normally, we would trim Amazon on such a two-session rally. But this AI boom is different, as Jim wrote in my Sunday column. The Mag 7 can’t be thought of as a cohort. We must treat each one as its own story. Jim said the “Mag 7 is too much of the market, get out” is a money-losing, false narrative, which was certainly playing out Monday. While the AWS deal is smaller, as if $38 billion is small in this age of AI spending, it underscores that OpenAI is heading toward a multi-cloud future. Until January, Microsoft was OpenAI’s exclusive cloud partner. That later shifted to a right of first refusal, which expired last week. Microsoft reaffirmed its role in the newly recapitalized OpenAI with a $250 billion commitment from OpenAI to keep scaling on Azure. OpenAI has also signed cloud deals with Google and Oracle. The timing of the AWS deal comes as Amazon doubles down on expanding cloud capacity. During Amazon’s third-quarter earnings call last week, the company said it has been focused on accelerating capacity for AWS, noting that it’s on track to double its overall capacity by the end of 2027. This capacity consists of power, data center, and chips, primarily its custom silicon, Trainium, and Nvidia. (Jim Cramer’s Charitable Trust is long AMZN, NVDA, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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