Shares of Marvell Technology (NASDAQ:MRVL) climbed 7% in pre-market trading Friday, while Astera Labs (NASDAQ:ALAB) advanced 8% after Amazon disclosed that its AI and chips operations are running at an annualized $25 billion in sales.
The announcement accompanied Amazon’s report of a fifth consecutive quarter of growth in its cloud business. Amazon highlighted milestones in its custom chip programs, and Amazon Web Services disclosed that $25 billion in annual sales are being powered by those in-house chips.
Market participants took the disclosure as a positive signal for suppliers of application-specific integrated circuits and networking chips. Bloomberg Intelligence commented that capital expenditure plans from large cloud customers, including Amazon and Alphabet, increase the chance of upside versus 2026-27 consensus for makers of computing and networking semiconductors.
Bloomberg Intelligence noted that, combined with AWS’s sales disclosure, the outlook for suppliers with meaningful exposure to infrastructure spending at major cloud providers is supported. The firm specifically referenced companies such as Broadcom, Marvell and Astera Labs as having significant ties to that customer-driven investment cycle.
The market response reflected expectations that chip vendors will benefit as major cloud providers expand investments in AI infrastructure. Shares of companies exposed to that spending moved higher on the news, with investors pricing in stronger demand for networking and specialized chip solutions tied to custom silicon efforts at large cloud operators.
Key context
- Amazon reported continued cloud revenue growth and disclosed an annual run rate of $25 billion for sales powered by its custom chips.
- Bloomberg Intelligence highlighted rising upside risk to industry consensus for computing and networking chipmakers tied to capex plans by major cloud customers.
- Market moves favored infrastructure-focused chip suppliers, with Marvell and Astera Labs among the beneficiaries cited.
Summary
The disclosure by Amazon that its custom-chip-powered sales have reached a $25 billion annual run rate, along with continued cloud growth, prompted gains in shares of chip suppliers with exposure to cloud infrastructure spending. Analyst commentary tied elevated capital expenditure intentions at large cloud providers to potential upside against 2026-27 consensus for computing and networking chipmakers.