For Amazon.com Inc. (NASDAQ: AMZN), rivalry and partnership go hand in hand.
According to Amazon Web Services CEO Matt Garman, the company competes with big name chip suppliers while simultaneously collaborating with them.
The AWS boss told CNBC on Tuesday that while the company develops its own chips, including Trainium and Graviton, it forged deep partnerships with Nvidia Corp (NASDAQ: NVDA), Advanced Micro Devices, Inc (NASDAQ: AMD), and Intel Corp (NASDAQ: INTC).
He added that AWS remains a major customer of these companies because clients demand access to multiple hardware options, reinforcing a strategy that balances competition with collaboration.
Multi-Model Ecosystem, Not A Winner-Takes-All Market
Garman said AWS focuses on delivering the best technology across models, applications, and infrastructure by working with leading AI companies like Anthropic and OpenAI. He emphasized that customers want access to a wide range of models and capabilities, and AWS enables that at scale.
He added that the AI market will support multiple winners, with different technologies serving different use cases rather than a single dominant player.
Investments And Custom Chips Strengthen AI Position
Garman said AWS treats its investments in companies like Anthropic as independent financial decisions while also benefiting from stronger partnerships. He noted that Anthropic's models run on Trainium chips, helping AWS improve chip design, performance, and efficiency.
He also pointed to customer adoption, including Uber moving significant workloads to AWS to use Graviton and Trainium, as validation of its integrated hardware and AI strategy.
Analysts See Strong AWS Momentum Despite Cost Pressures
JPMorgan analyst Doug Anmuth maintained an Overweight rating on Amazon and raised his price forecast to $280 from $265.
He also increased AWS forecasts by about 2%-3% through 2026 and more than 4% in 2027, projecting growth of roughly 28%-30% in 2026 and 26% in 2027.
AWS demand continues to outpace supply, he added. Backlog will likely rise as Amazon scales infrastructure and AI chips, while investments in international expansion, pricing, quick commerce, and Amazon Leo weigh on near-term operating income.
Fuel costs are also a headwind but Anmuth maintains a positive medium-term outlook.
Separately, Bank of America Securities analyst Justin Post reaffirmed a Buy rating with a $275 price target, citing strong enterprise demand for AI services. Rapid growth at Anthropic suggests widespread adoption of AI tools, potentially driving further upside for AWS.
Post highlighted that capturing a significant share of Anthropic's workloads could add up to $1 billion in quarter-over-quarter AWS revenue. Rising AI demand, a growing backlog, and plans to double AWS power capacity by 2027 may further support revenue growth and enhance returns on capital spending.
AMZN Price Action: Amazon.com shares were up 2.72% at $227.26 at the time of publication on Thursday, according to Benzinga Pro data.