Amazon Just Revealed This 1 Business Is Worth More Than 82% of Fortune 500 Companies (Hint: Not Cloud Computing)
Key Points
Amazon's 2025 Shareholder Letter was chock-full of insight into the company's strategy and future plans.
CEO Andy Jassy said one business is "on fire," and "much larger than most think."
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When it comes to industry-leading businesses, very few companies can hold a candle to Amazon (NASDAQ: AMZN). While it didn't invent online retail, its success in e-commerce is the stuff of legend. The company pioneered modern cloud computing when it launched Amazon Web Services (AWS) in 2006, a space it still dominates and which now forms the foundation of its business empire. Amazon's ability to expand into new businesses has helped make it one of the world's most successful companies.
In Amazon's annual shareholder letter, CEO Andy Jassy just revealed what could ultimately be one of the company's most successful ventures yet.
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Next big moneymaker
In Amazon's yearly missive, CEO Andy Jassy waxed poetic about the path that led him to Amazon and what the company's future might hold. He also spoke at length about artificial intelligence (AI) and where the company fits into the broader landscape.
The biggest revelation was the rate at which Amazon's AI chip business is accelerating. He noted, "Our chips business is on fire [which] changes the economics of AWS, and will be much larger than most think." In fact, the annual revenue run rate of Amazon's chips business -- which includes the company's Graviton, Trainium, and Nitro chips -- is now over $20 billion and "growing at triple-digit percentages year-over-year." Then, Jassy dropped this nugget:
If our chips business was a stand-alone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion. There's so much demand for our chips that it's quite possible we'll sell racks of them to third parties in the future.
For context, Amazon's total revenue in 2025 was $717 billion, so this would represent roughly 7% of the company's annual revenue. Furthermore, at $50 billion annually, Amazon's AI chip business would be bigger than 82% of the Fortune 500 companies.
Jassy was adamant that the size of the opportunity at hand justifies Amazon's plans to spend $200 billion in capital expenditures (capex) in 2026. In fact, Amazon already has customer commitments for the majority of this year's capex investment, which the company will monetize in 2027 and 2028. Jassy was also clear that Amazon won't hesitate to sacrifice short-term results for the long-term potential. "AI is a once-in-a-lifetime opportunity where the current growth is unprecedented and the future growth even bigger," he wrote.
Amazon might seem pricy at 33 times earnings, but that's roughly half the stock's three-year average multiple of 67. This gives investors the opportunity to own an industry leader at an attractive price.
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Danny Vena, CPA has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
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