Amazon.com's Cloud Computing Division Struggles Amidst Fears of Declining Growth Prospects and Weak AWS Performance

Amazon.com's stock has struggled lately due to concerns over its cloud computing division's growth prospects. Jim Cramer believes the company should focus on NVIDIA's AI GPUs instead of its in-house AI chips. Cramer maintains that Amazon needs to buy NVIDIA to overcome its struggles.

Amazon.com, Inc. (NASDAQ: AMZN) has been facing significant headwinds in its cloud computing division, AWS, which has raised concerns among investors. The company's stock has struggled, falling by 8% following its latest earnings report, as highlighted by the AI Investor podcast [1]. The podcast hosts, Austin and Eric Bleeker, discussed the competitive landscape, noting that while Microsoft and Google's cloud divisions have shown impressive growth, AWS has lagged behind.

The hosts attributed the stock decline to several factors, including CEO Andy Jassy's unclear responses during the earnings call and concerns about AWS's market share. They also pointed out that Amazon's growth rate in AWS has been significantly lower than that of Microsoft and Google, with AWS's growth rate increasing by only 0.6% compared to Microsoft's 8% increase [1].

Adding to the challenges, Amazon has been losing market share in the AI chip market. According to the podcast, while Microsoft and Google are investing heavily in AI chips, Amazon has been investing less in NVIDIA GPUs, which are in high demand for AI applications [1].

Jim Cramer, a prominent financial analyst, has suggested that Amazon should focus on NVIDIA's AI GPUs instead of its in-house AI chips. He believes that Amazon should acquire NVIDIA to overcome its struggles in the AI chip market. Cramer's suggestion comes amidst reports that NVIDIA's sales are expected to grow significantly in the coming years, with revenue projected to jump from $208 billion in FY26 to $292 billion by FY28 [2].

However, the acquisition of NVIDIA by Amazon could be a complex and expensive process. The company's market capitalization is currently around $2.46 trillion, which makes it one of the most valuable companies in the world. Any acquisition would need to be carefully planned and executed to ensure that it aligns with Amazon's long-term strategic goals.

In conclusion, Amazon's stock has faced challenges due to concerns over its cloud computing division's growth prospects. Jim Cramer's suggestion to focus on NVIDIA's AI GPUs is one potential solution to these challenges. However, any acquisition would need to be carefully considered and executed.

References:
[1] https://247wallst.com/investing/2025/08/12/is-amazon-nasdaq-amzn-stock-a-sell-after-falling-post-earnings/
[2] https://finance.yahoo.com/news/nvidia-amd-price-targets-raised-165957508.html