Amazon (NASDAQ:AMZN) reported strong third-quarter results on Thursday, with its cloud business AWS showing robust artificial intelligence (AI)-driven demand resulting in a 150% quarterly surge in Trainium chip usage.
CEO Andy Jassy outlined Amazon’s expansion plans during the earnings conference call, saying it added more than 3.8 gigawatts (GW) of power in the past year, double the power capacity that AWS had in 2022. He also pointed out AWS is on track to double again by 2027.
Jassy said that he expects Amazon to add at least another 1 gigawatt of power in the fourth quarter alone. He noted, “overall in the industry, maybe the bottleneck is power.” The market responded enthusiastically to the reenergized company, boosting Amazon stock by nearly 10% to $244.22 per share, a new record high.
As this signals massive investments ahead, the three stocks below look poised to win big from Amazon’s growth plans. Let’s see how Nvidia (NASDAQ:NVDA), Vertiv (NYSE:VRT), and Talen Energy (NYSE:TLN) will benefit from this huge capacity expansion.
Nvidia (NVDA)
Nvidia stands as a primary supplier of graphics processing units (GPUs) for AWS, essential for handling the AI workloads driving this growth. As Amazon doubles capacity by 2027, Nvidia’s Blackwell chips will see heightened demand for training and inference tasks.
AWS relies on Nvidia hardware for instances such as Amazon’s EC2 P5, a family of high-performance compute instances offered by AWS. These are designed specifically for accelerating generative AI, machine learning training, inference, and high-performance computing (HPC) workloads. Clients such as Anthropic use such instances in large-scale model development.
The partnership with Nvidia was established in 2010 and has fostered innovations in SageMaker — Amazon’s cloud-based machine learning service — and supercomputing capabilities. Jassy’s emphasis on adding gigawatts aligns with Nvidia’s energy-efficient designs, which help mitigate power constraints while enabling denser deployments.
This relationship positions Nvidia to capture a significant share of AWS’s $100 billion-plus AI capex, bolstering its data center revenue, which already dominates its earnings. Analysts forecast continued double-digit growth for the chipmaker, fueled by hyperscaler expansions like this one. Although risks include competition from custom chips, Nvidia’s ecosystem lock-in makes it a resilient beneficiary.
Vertiv Holdings (VRT)
Vertiv Holdings provides vital infrastructure for data centers, focusing on power distribution, liquid cooling, and thermal management—key to AWS’s high-density AI builds. The plan to double capacity amplifies the need for Vertiv’s solutions, which manage heat from power-hungry servers amid Jassy’s noted bottlenecks.
While AWS innovates internally, Vertiv supplies components like pumping units and water systems for efficient GW-scale operations. It has raised its full-year outlook multiple times this year, citing surging AI data center orders, with third-quarter sales and backlog hitting records Vertiv’s stock is up 70% year-to-date as a result.
Amazon’s AWS expansion could drive multi-year contracts, as Vertiv’s tech allows for sustainable scaling without excessive energy waste. Its role in liquid-cooled setups directly addresses the power crunch, enabling AWS to pack more GPUs per facility. Earnings momentum remains strong, with projections for 20% or more annual growth tied to AI infrastructure.
Although it faces potential headwinds, such as supply chain issues, Vertiv’s market position in critical tech ensures gains from Amazon’s aggressive timeline.
Talen Energy (TLN)
Talen Energy specializes in nuclear power, with direct agreements to supply AWS data centers, making it a crucial enabler of the capacity doubling. Jassy’s bottleneck comments underscore the industry’s power shortages, where Talen’s carbon-free, reliable sources provide a solution for GW-scale needs.
Co-located facilities and expansions, including recent acquisitions, align with AWS’s requirements for dedicated energy amid surging AI demand. This positions Talen for long-term revenue from hyperscaler contracts, with earnings expected to rise 280% this year and another 255% in 2026. Last year, it sold its Cumulus data center campus in northeast Pennsylvania to Amazon for $650 million, with Talen continuing to provide nuclear energy to the facility from its adjacent Susquehanna plant.
Nuclear’s stability offers an edge over variable renewables, helping AWS meet sustainability goals while scaling. Talen’s pivot to AI-focused power deals has boosted its valuation, with more upside as bottlenecks persist. Challenges like regulatory hurdles could arise, but its AWS exposure makes it a standout winner in the utility space.
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