Amazon shares are underperforming the Nasdaq 100 in 2025

Amazon is falling behind in a market fixated on artificial intelligence. After its July 31 earnings letdown, the stock has trailed the Nasdaq 100 throughout the year. This gap only widened over the past two weeks. 

The Nasdaq 100 is up by almost 13% in 2025, more than double Amazon’s 5.5% rise. The company’s shares now sit in the lower half of Nasdaq 100 performers, despite striking a $1 billion cloud deal with the Trump administration, as reported earlier by Cryptopolitan. 

The stock also trades near the deepest discount to the benchmark on record, a sharp turn for a stock that spent much of the last 20 years at a clear premium.

Amazon’s slide followed weaker growth at Amazon Web Services, the cloud unit long seen as the group’s profit engine. The shortfall stoked worries that AWS may be ceding ground to rivals. It also fed a larger concern among investors: that Amazon’s push into AI has not yet translated into results on the scale seen at other giants such as Microsoft Corp. and Meta Platforms Inc.

Some on Wall Street are now reframing Amazon’s diversified model as a negative. The argument is that the mix of businesses, spanning online retail, advertising, cloud services and physical stores, dilutes the stock’s appeal for those who want the firm to bet primarily on AI.

“For a lot of investors, Amazon just isn’t a pure-play way to play a theme you believe in,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund. “People want purity in their investments. And if you want that, Amazon looks like a company that’s watered down by all the different businesses.”

Amazon’s e-commerce model has become less attractive with the rise of AI

E-commerce still delivers the bulk of Amazon’s revenue. Over the years, its heavy spending across many areas, from AWS to Whole Foods, has helped attract growth-oriented shareholders. Last week, the company said it plans to more than double the number of cities where it offers same-day grocery deliveries, underscoring its continued commitment to logistics and retail.

But with AI now the dominant topic in markets, that diversified model is drawing less enthusiasm. Investors watching cloud growth are comparing AWS against faster-growing competitors and rewarding firms most closely tied to AI infrastructure and services.

By the numbers, AWS remained the market leader in renting computing power but posted 17% revenue growth in Q2. That pace lagged Microsoft’s Azure, where sales climbed 39%, and Google Cloud, which rose 32%. The contrast has sharpened the debate about whether AWS is losing share and whether Amazon’s AI spending is paying off quickly enough.

Capital is also flowing to other companies building out AI capacity. Shares of Oracle Corp. and Nvidia-backed CoreWeave Inc. have surged this year as they scale up computing resources, based on earlier reports by Cryptopolitan. Oracle deepened its move into AI services with a deal last month to provide OpenAI with an additional 4.5 gigawatts of U.S. data-center power, and its stock is up almost 50% this year. 

Amazon’s AI chip leader moved to Arm

In a separate move that underscores shifting dynamics in the chip world, Arm Holdings has hired an Amazon artificial intelligence chip leader to advance its own silicon plans. Rami Sinno, who worked on Amazon’s in-house AI chips Trainium and Inferentia, designed to build and run large AI systems, has joined Arm, a person familiar with the matter said on Monday.

Arm historically has not produced complete chips. Chip makers including Apple and Nvidia use Arm technology in their processors, a model that has made Arm central to smartphones and increasingly to data-center and AI hardware.

That stance is changing. In July, Arm said it would invest profits to develop chips and similar components. Hiring Sinno signals the company’s intent to move further into full-chip development as demand for AI accelerators, custom silicon, and power-efficient designs keeps rising.

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