Amazon concluded a week of significant developments, marked by technological strides in its cloud division and unexpected turbulence in a key logistics relationship. The company’s shares currently trade at $229.75, reflecting a year-to-date gain of just under 5%, a performance that notably lags the broader S&P 500 index.
A Strategic Pivot in Cloud Computing
The spotlight fell on Amazon Web Services (AWS) during its re:Invent conference in Las Vegas, held from December 1st to 5th. The division unveiled its next-generation Trainium3 chip, designed for artificial intelligence workloads. AWS claims the new silicon delivers a fourfold increase in performance for both AI training and inference while cutting power consumption by 40%. In a clear signal of its long-term roadmap, AWS CEO Matt Garman already teased a future Trainium4 iteration. This move underscores Amazon’s strategic drive to reduce reliance on Nvidia’s dominant GPUs and leverage proprietary hardware for cost efficiency.
AWS also introduced the Graviton5 processor, touted as the most powerful in its series to date. Featuring 192 cores, the chip promises a 25% performance uplift over its predecessor. Furthermore, the company demonstrated autonomous AI agents capable of executing extended, multi-step tasks independently. These announcements represent a concerted effort to solidify Amazon’s position in the fiercely competitive enterprise AI market.
Logistics Headwinds Emerge
Simultaneously, a crucial commercial partnership has hit an unexpected snag. According to a report by the Washington Post, negotiations between Amazon and the United States Postal Service (USPS) have stalled. The new Postmaster General, David Steiner, is reportedly planning an auction process for early 2026. This would force Amazon to compete against other shipping providers for access to USPS infrastructure.
Amazon stands as the postal service’s largest single customer, generating over $6 billion in annual revenue for USPS—approximately 7.5% of its total income. The existing contract is set to expire in October 2026. Company officials expressed surprise at the potential shift to an auction model after nearly a year of direct negotiations.
Should investors sell immediately? Or is it worth buying Amazon?
The dependency, however, is not one-sided. Amazon itself delivered an estimated 6.3 billion parcels in 2024, trailing only slightly behind USPS’s 6.9 billion. Market analysts project that Amazon will surpass the postal service in total parcel volume by 2028, a timeline that could accelerate if the partnership dissolves.
Financial Foundation and Market Sentiment
Amazon’s most recent quarterly report, for Q3 2025, showed revenue growth of 13% to $180.2 billion. AWS was a standout, expanding by 20% to $33 billion—its strongest growth rate since 2022. Operating profit settled at $17.4 billion, weighed down by a $2.5 billion settlement with the Federal Trade Commission (FTC) and $1.8 billion in severance-related charges.
Looking ahead, management issued Q4 revenue guidance in the range of $206 billion to $213 billion. Investments in AI infrastructure remain substantial. To fund this expansion, Amazon placed $15 billion in US bond offerings in November, its first such debt issuance in three years.
Wall Street maintains a generally optimistic outlook. The average price target among 46 analysts sits at $284, implying roughly 24% upside from current levels. Specific bullish calls include Wedbush’s $340 target and Bank of America’s forecast of $303 per share.
The market awaits Amazon’s next quarterly results, expected in late January or early February 2026. Until then, the unresolved USPS situation will likely remain a focal point for investors, with some observers noting that an end to the partnership could ultimately yield cost advantages for Amazon in the medium term.
Ad
Amazon Stock: Buy or Sell?! New Amazon Analysis from December 6 delivers the answer:
The latest Amazon figures speak for themselves: Urgent action needed for Amazon investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 6.
Amazon: Buy or sell? Read more here...
