Shares of Amazon.com Inc (NASDAQ: AMZN) have dropped roughly 9% over the past month, sliding from $249.32 in early November to $234.50 as of December 2. Yet retail sentiment on Reddit and prediction markets tells a different story. Mentions of Amazon across investing communities remain consistently bullish, with sentiment scores holding between 62 and 75 on a 100-point scale throughout the decline. The catalyst? Amazon’s unveiling of Trainium3, its latest AI chip designed to undercut NVIDIA Corporation (NASDAQ: NVDA) on price and performance in the booming AI infrastructure market.
Prediction markets on Polymarket show a 30.5% probability that Amazon will hit $260 before year-end, implying 10.9% upside from current levels. Meanwhile, 64 of 67 Wall Street analysts rate the stock Buy or Strong Buy, with an average price target of $295.03. That’s a 26% premium to where shares trade today.
Reddit Sees AI Chip Play as Game-Changer
Discussion on r/stocks has surged around Trainium3, with one post drawing 242 upvotes and 56 comments. Reddit user Axirohq framed the opportunity directly:
“Big move from Amazon: new AI chip Trainium3 aims to undercut Nvidia. Companies want cheaper AI compute, and Nvidia’s pricing + demand backlog is still insane. If Amazon can offer decent performance for less, there’s definitely a market for it.”
The post also acknowledged the challenge, noting that “Trainium3 doesn’t have anything close to Nvidia’s software ecosystem. CUDA and the entire Nvidia stack are still massive moats.”
Big move from Amazon: new AI chip Trainium3 aims to undercut Nvidia
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Investors are weighing three factors driving optimism despite the price drop:
- AWS revenue reaccelerated to 20.2% growth in Q3, the fastest pace since 2022, with AI chip adoption up 150% quarter-over-quarter
- Net income surged 38% year-over-year to $21.19B, demonstrating operating leverage at scale
- Management raised CapEx 55% to $35.1B, signaling aggressive investment in AI infrastructure that could pay off long-term
Trading Activity Reflects Growing Conviction
Amazon rebounded 2.33% over the past week, recovering from $229.16 and suggesting the selloff may have bottomed. One r/investing user planning 2026 allocations wrote: “I think I’m going to spend 2026 buying up Apple, Amazon and Nvidia,” grouping Amazon with the market’s top AI plays.
Investors should watch AWS growth trends in Q4 guidance and Trainium3 adoption rates. For deeper analysis on Amazon’s AI positioning, follow discussions on r/stocks where technical debates around the chip’s competitive moat continue to evolve.
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