Why Amazon Stock Jumped 14% in May
Shares of Amazon (NASDAQ: AMZN) stock gained 14% in May, according to data provided by S&P Global Market Intelligence. It's building on the momentum of a public craze about the possibilities of artificial intelligence (AI), as management announced its own generative AI efforts back in March and then debuted several new AI-powered devices in May.
Amazon had been losing some steam over the past year as sales growth decelerated in the aftermath of astronomical pandemic growth, and profitability has been pressured as demand slows. Even its reliable Amazon Web Services (AWS) division, which is a profit-generating machine, is feeling the pinch as business customers balance their budgets and curtail spending.
But Amazon is doing one of the things it does best, which is invest in technology to dominate new sectors. It has been using AI (and machine learning) for years, since before it became the buzzword it is right now, for functions like predicting sales growth and managing inventory. In March, Amazon announced a collaboration with Nvidia to develop large language models, one of the foundations of generative AI. It recently launched several new AI-powered devices that upgrade its suite of products. These products, part of the Echo line, are Alexa-enabled.
Source Fool.com
