Amazon Stock: AI Chips Will Be ‘In Focus’ As Google Ramps Up Challenge To Nvidia

Reports that the parent company Facebook Meta platforms (META) is in talks with alphabet (GOOGL) The use of Google’s custom AI chips has shaken the markets, sending shares of Google and the king of AI chips soaring. Nvidia (NVDA) less. Amazon (AMZN) stock rose Tuesday as well, and could be another company to watch as cloud players challenge Nvidia’s chip dominance.

Amazon is hosting its annual Re:Inventing the Cloud conference in Las Vegas next week, as the tech giant looks to showcase its strengths in artificial intelligence as the No. 1 cloud provider by market share. Google News could draw more attention to a key part of Amazon Web Services’ AI push: custom chips.

“The AWS re:Invent reading for next week is interesting,” RBC Capital analyst Brad Erickson wrote to clients on Tuesday in response to a report from The Information about talks between Google and Meta.

For investors, “the focus will be on expanding Trainium 2 customers beyond Anthropic and any details the company can share about the Trainium 3 rollout,” Erickson wrote.

Ericsson added the caveat that Amazon and Google’s custom chips are not the same. Erickson noted that “the drumbeat of suppliers not naming Nvidia could get louder” after Google’s success.

Beyond the reported interest from Meta, Google’s custom tensor processing modules have captured investor interest because they have been used to train the new Gemini 3 model. Google’s ability to train a large language model on custom chips within its cloud service has raised concerns about the rise of artificial intelligence more broadly.

“If Google wins and OpenAI loses, a lot of the spending will go away from Nvidia,” he said. AMD (AMD), Microsoft (MSFT) CoreWeave (CRWV), oracle (ORCL) and even Broadcom (AVGO),” Milius Research Analyst Ben Retzes wrote to clients on Monday.

Google is developing its own custom AI processors in partnership with Broadcom. But Broadcom still “needs more than just Google.” Ritzes noted.

Trinium chip from Amazon

Meanwhile, Amazon is fighting the perception that it is falling behind Microsoft (MSFT) and Google are in the race to win cloud AI contracts. A key part of its strategy is the ability to reduce computing costs through custom chips.

CEO Andy Jassy told analysts in late October that the second-generation Trainium chip is a “billion-dollar business” that is growing 150% quarter-on-quarter. That includes 500,000 chips in the Project Rainier supercomputer that Amazon recently built for Anthropic. Amazon has invested $8 billion in Anthropic and expects to have the company’s AI model, called Claude, trained and deployed on more than 1 million Trainium chips by the end of the year, Jassy said on the Oct. 30 earnings call.

“We also continue to work closely with chip partners like Nvidia, with whom we continue to order very large volumes, as well as with AMD and Intel,” Jassy added.

Google, of course, is also a major Nvidia customer. The chip maker pointed to this fact in a statement published on X on Tuesday.

The post read: “We are happy with Google’s success. They have made great progress in artificial intelligence, and we continue to supply Google.” “Nvidia is a generation ahead of the industry – it’s the only platform that runs every AI model and does it everywhere computing happens. Nvidia offers greater performance, versatility and replaceability than ASICs, which are designed for specific AI frameworks or functions.”

ASICs refer to application-specific integrated circuits, or chips designed for specific tasks.

Erickson added in his note that investors were “somewhat less positive about the Trainium family having the horsepower to drive further physical acceleration in 2026.” The past of least resistance will see Amazon shift to more Nvidia Blackwell chips to meet demand for AI computing, he added.

Amazon stock is bouncing off its 200-day line

On the stock market today, Amazon stock advanced 1.8% at 230.30 in recent trading. Shares are rebounding back above Amazon’s 50-day moving average.

Meanwhile, Amazon is up about 4.5% year to date, fueled by three straight days of gains. Shares rose in late October after the tech giant reported stronger-than-expected cloud revenue in the third quarter. But a broader decline in AI-related stocks wiped out the rally. Shares hit a November low of 215.18 on Friday, just above Amazon’s 200-day moving average, before bouncing back.

Amazon stock carries an IBD Composite Rating of 90 out of 99, according to IBD Stock Screener. IBD’s Composite Rating is a combination of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

Meanwhile, Google stock advanced 1.5% to 323.15 in recent trading, with shares remaining near record highs. Nvidia is down 3.5% to 176.11 while Microsoft is slightly ahead at 476.76.

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