On Thursday, Amazon.com Inc. (NASDAQ: AMZN) introduced its new Graviton5 processors to help customers run cloud applications faster, more efficiently, and at lower cost as their workloads grow more complex.
The move intensifies its rivalry with Intel Corp (NASDAQ: INTC) and Advanced Micro Devices (NASDAQ: AMD), as per prior reports.
Hyperscalers like Amazon, Microsoft Corp (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOGL), and Meta Platforms Inc (NASDAQ: META) shifted to custom chips to cut costs, fix compatibility issues, and ease supply shortages.
About The Chip
Amazon says the chip delivers up to 25% better performance than the previous version while using less energy, helping organizations meet both budget and sustainability goals.
The new Graviton5-powered EC2 M9g instances are built to handle large-scale tasks more smoothly by speeding up how quickly data moves inside the system.
It helps demanding applications such as gaming, big data tools, and online services run more reliably and respond faster.
Amazon also upgraded how quickly the chip accesses important information and how well it handles memory, which improves performance for apps that work with large or constantly changing data.
Network and storage speeds also get a boost, allowing faster transfers, backups, and support for systems that depend on real-time data.
Graviton5 is designed to deliver these improvements while using energy more efficiently.
Amazon says the gains come from updating the chip's underlying design and tailoring it specifically for how Amazon Web Services customers use the cloud.
Amazon added a new security layer that uses a more rigorous verification method to ensure systems behave as intended, and the company plans to let customers review this work directly.
Amazon has opened Graviton5-based M9g instances for preview, with more versions designed for heavy computing and memory needs planned for 2026.
Amazon Stock Performance
The $2.5 trillion tech giant has gained just 4% year-to-date.
Amazon won fresh bullish support from Wall Street as analysts praised its agent-driven AI strategy and new custom chips unveiled at AWS re: Invent.
Bank of America's Justin Post noted Amazon's new autonomous AI agents, deeper Nvidia collaboration, and Trainium4 roadmap strengthen AWS's long-term position. He expects AWS revenue growth to approach 25% in 2026.
JP Morgan's Doug argued that Amazon is closing the competitive gap through stronger Trainium performance, Bedrock momentum, and partnerships with Anthropic and OpenAI.
He projected 23% AWS growth in both the fourth quarter and 2026, driven by Trainium 3, Trainium 4 development, and new AI Factories.
Wedbush's Scott Devitt noted Trainium3, the Nova 2 models, and new autonomous agents—positions 2026 as a breakout year for Amazon.
He pointed to rising demand, higher capex, and AWS's expanding capacity as catalysts for accelerating growth.
AMZN Price Action: Amazon.com shares were down 1.58% at $228.72 at the time of publication on Thursday, according to Benzinga Pro data.