Amazon Just Committed $200 Billion to Capital Expenditures. This Is the AI Stock That Will Benefit Most in 2026.
Key Points
Nvidia and Amazon have a 15-year partnership and are closely integrated.
Nvidia's latest results were still stellar.
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Perhaps the biggest surprise in Amazon's (NASDAQ: AMZN) latest results was the additional $200 billion it plans to spend -- mostly on Amazon Web Services (AWS) -- this year. That figure blew well past analyst expectations and shows just how much Amazon and companies like it are betting on AI.
It's really no wonder why. AWS was far and away Amazon's fastest-growing revenue stream as of its latest quarter, with sales up 24% year over year for the 2025 fourth quarter.
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While Amazon does design some of its hardware in-house, even Jeff Bezos' brainchild doesn't have all the money and expertise it needs to create its own AI hardware ecosystem. And, like most other companies involved in the AI industry, Amazon needs to work with Nvidia (NASDAQ: NVDA) to bring its goals to fruition.
So, I expect Nvidia will be one of, if not the biggest beneficiary of Amazon's $200 billion investment.
Image source: Getty Images.
With a little help from its friends
Nvidia doesn't need much in the way of an introduction. The company was probably the biggest stock market story in 2025, especially when it broke out above $5 trillion in valuation late last year.
Its graphics processing units (GPUs) are the preferred hardware for all the most advanced AI programs out there. And while Nvidia is facing some competition now, namely from Alphabet's (NASDAQ: GOOG) Tensor Processing Units (TPUs), it remains the dominant AI hardware player with about 92% market share.
Amazon and Nvidia have a rather cozy relationship stretching back 15 years, and it seems to be a mutually beneficial one. AWS' AI infrastructure runs on Nvidia hardware, and the two companies have heavily integrated their technology.
In December of last year, Amazon and Nvidia expanded their partnership with AWS, adding support for Nvidia's NVLink Fusion AI infrastructure. Amazon also plans for its Trainium4 chip to integrate and play nice with Nvidia's products.
The partnership expansion includes the integration of Nvidia's software into AWS' AI suite, meaning AWS developers will be able to build their own Nvidia-based AI programs and agents.
In short, the two companies are heavily integrated, and with Amazon spending so much on AI, you can bet Nvidia will absorb a good chunk of that cash, though Nvidia was hardly hurting before Amazon's planned spending surge.
Still king of the road
Despite strong results recently, Nvidia stock dipped after its recent earnings report as investors expressed some concern about the future. But I view this as an opportunity to buy shares before Nvidia's next growth cycle.
For Q4 2025, Nvidia saw its revenue hit $68.1 billion, up 73% over Q4 2024. Over the same period, it grew its gross margin 2 points to 75%, its net income 94% to $42.96 billion, and its diluted earnings per share (EPS) 98% to $1.76.
The full-year 2025 numbers were also incredible. Revenue for the year hit $215.9 billion, a 65% increase year over year; operating income and net income both grew 58% over 2024; and diluted EPS for 2025 came in at $4.77, up 60% over the previous year.
It is worth noting that for the full year, Nvidia's gross margin fell 3.9 points to 71.3%, but that seems to be the only hiccup in an otherwise stellar earnings report. Also, while its gross margin fell, Nvidia's operating and net margins remained stable at 60.38% and 55.6%, respectively, so it is still exceedingly profitable.
Nvidia also maintains a very healthy balance sheet with cash reserves standing at $62.5 billion at the end of its fiscal 2025, up 44% over 2024 and comfortably higher than the company's liabilities of $49.5 billion.
Finally, Nvidia's operating cash flow grew 60% to $102.7 billion for 2025, so it's not hurting for money to continue expanding its business, to say the very least, nor is it heavily indebted.
Add all that together, and I think you've got a winner on your hands or rather a continued winner in Nvidia's case, as the stock is up 50% over the past year. Nvidia is still going strong, and Amazon's AI spending surge is set to keep the growth coming.
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James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.
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