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On Friday, DA Davidson reaffirmed its Buy rating on Amazon.com shares (NASDAQ:AMZN) with a steady price target of $230.00. The endorsement follows the recent unveiling of Anthropic’s Claude 4 model family and its implications for Amazon’s cloud computing business. DA Davidson’s analyst highlighted the significance of the relationship between Amazon and AI research firm Anthropic, suggesting that the Claude 4 model was likely trained on a cluster of Amazon’s Trainium chips. This development comes as NVIDIA (NASDAQ:NVDA), the dominant player in AI chips with a market cap of $3.2 trillion and an impressive 114.2% revenue growth over the last twelve months, faces increasing competition in the AI computing space.
According to the analyst, the successful deployment of Claude 4, which required substantial computational power, marks a positive development for Amazon. The ability of Anthropic to train advanced AI models on Trainium chips could position Amazon Web Services (AWS) as a more cost-effective solution compared to competitors like NVIDIA, which currently maintains an excellent financial health score according to InvestingPro data and a perfect Piotroski Score of 9, indicating strong operational efficiency.
Anthropic’s CEO, Dario Amodei, acknowledged the considerable computational resources needed for Claude 4, noting the advantages of scaling both pre-training and post-training compute. The analyst from DA Davidson interprets this as a strong indicator of the potential of Amazon’s latest generation Trainium chips, which could enhance the appeal of AWS EC2 instances for AI and machine learning applications.
The analyst’s report aligns with observations from a "first-takes report" by colleague Alex Platt, which provided detailed insights into the model and lab-specific developments. The positive outlook on Amazon’s Trainium technology and its application in cutting-edge AI models like Claude 4 reinforces the Buy rating and $230 price target set by DA Davidson for Amazon stock.
In other recent news, NVIDIA is drawing attention with several notable developments. Susquehanna analyst Christopher Rolland has maintained a Positive rating on NVIDIA, setting a price target of $180. This comes as NVIDIA prepares for its upcoming earnings report, with expectations of generally in-line revenue despite a $1 billion impact from China’s H20 restrictions. Meanwhile, Cantor Fitzgerald has reiterated its Overweight rating on NVIDIA, targeting a $200 price point. The firm predicts a more favorable outlook for the July quarter and anticipates strong demand in the Data Center segment, projecting revenues of $200 billion for CY25 despite the China embargo.
In another significant development, NVIDIA has partnered with Navitas Semiconductor to develop an 800V high-voltage direct current (HVDC) architecture for AI data centers. This collaboration aims to improve power efficiency and reduce infrastructure complexity, with expectations of a 5% boost in power efficiency and a 70% reduction in maintenance costs. Additionally, NVIDIA’s new architecture is expected to minimize copper usage by up to 45%, addressing the increasing power demands of AI data centers. Navitas’ advanced power semiconductor technologies play a crucial role in this initiative, highlighting the potential for enhanced scalability and efficiency. These recent developments underscore NVIDIA’s ongoing efforts to innovate and expand its capabilities in the technology sector.
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