Nvidia Stock Jumps as Massive AWS Deal Fuels Fresh AI GrowthIntroduction

Nvidia jumped 8.74% on Thursday, August 27, closing at $227.98 after pairing a blowout fiscal second-quarter report with news that Amazon Web Services will deploy 2 million additional Nvidia GPUs across 2027 and 2028. Nearly four weeks later, the shares closed Friday, September 18, at $222.27, still about 6.01% above the $209.66 close that preceded the announcement but 2.50% below the post-earnings peak, as a Federal Reserve rate hike, a 10-year Treasury yield near 5%, and a faster Huawei chip roadmap tested the rally. That gap between a headline jump and a sustained move is what makes the AWS expansion worth revisiting now. This piece walks through what the two companies actually announced, why the market rewarded Nvidia, where the chart stands heading into the fall, and how bulls and bears are reading the same commitment.

 

 

Nvidia and AWS released the expansion on Wednesday, August 26, the same evening Nvidia reported its fiscal second-quarter results. The headline commitment is 2 million additional Nvidia GPUs across AWS's global infrastructure in 2027 and 2028, spanning the Blackwell Ultra, Rubin and Rubin Ultra architectures. That figure sits on top of the more than 1 million GPUs AWS said in March it would begin adding in 2026, and AWS said demand has since exceeded its own expectations. On the earnings call, Nvidia CFO Colette Kress described the rollout as beginning in the current quarter and running through the second quarter of fiscal 2029.

The package reaches well beyond GPUs. The companies will bring Nvidia Vera CPU infrastructure to AWS, extend NVLink Fusion with Nvidia's custom high-bandwidth memory so Amazon's Trainium chips can share racks with GPUs, and build AI factories for the U.S. government that include 100,000 GPUs on secure AWS infrastructure for national-security workloads. Amazon Robotics will also adopt Nvidia's physical AI platform. Jensen Huang said demand is running ahead of every forecast, while AWS CEO Matt Garman framed the deal as giving frontier labs, enterprises and governments more ways to build on AWS.

The results it accompanied were just as large. Nvidia posted fiscal second-quarter revenue of $96.2 billion, up 106% from a year earlier, with Data Center revenue of $89.0 billion, up 117%, a 75.0% gross margin, and adjusted earnings of $2.22 per share against a consensus of about $2.09. The company guided the current quarter to between $105.8 billion and $110.2 billion in revenue, above the roughly $104 billion to $105 billion Wall Street had expected. Its supply commitments more than doubled from $119 billion to $279 billion, mostly tied to memory purchases, and it returned $26 billion to shareholders in the quarter. On the Amazon side, AWS revenue rose 37% year over year to $42.23 billion in its most recent quarter, its fastest growth in 18 quarters, while Amazon (NASDAQ:AMZN) is on track for roughly $220 billion in capital spending in 2026.

 

The move looked surprising because the setup was cautious. Nvidia closed at $209.66 on August 26, down 1.59% ahead of the report, and it had dipped the day after each of its previous four strong earnings releases. Morgan Stanley analysts had warned that a routine beat-and-raise would not be enough to change that pattern. After-hours trading was choppy before buyers took control, and the 8.74% gain on August 27 to $227.98 was the stock's biggest one-day percentage advance since April 9, 2025. The Nasdaq Composite rose 1.57% to 26,541.35 that day, and Broadcom (NASDAQ:AVGO) gained 4.49% to $371.54, while AMD (NASDAQ:AMD) slipped 0.89% to $476.67.

Two things did the heavy lifting. The first was guidance, since a fiscal 2028 revenue growth outlook near 70% and hyperscaler capital spending expected to climb from about $800 billion this year to $1.3 trillion next year answered the fear that the buildout was peaking. The second was the AWS commitment, which CNBC characterized as evidence that hyperscalers keep spending despite worries that they are running out of room. It is worth being precise here, because the AWS announcement and the earnings report landed together, and analysts credited the results and guidance for most of the move, with the cloud deal reinforcing the demand story rather than acting alone.

What happened next shows how the market is treating the deal. On Friday, August 28, Nvidia fell roughly 4% in a broad semiconductor pullback while Amazon gained about 3% to 4%, a split that suggested investors saw the buyer's visible AI growth as the more attractive side of the trade. Nvidia then rebounded about 5% the following week, closing at $230.36 on September 4 after stalling near the $236 area. More recently, a September 14 selloff tied to calls to slow AI development dragged chip stocks lower, and Nvidia closed Thursday, September 17, at $219.34. On Friday it added 1.34% to $222.27 after Huang said Nvidia expects to sell twice as many chips next year, up from a prior outlook of 70% growth.

 

 

 

Nvidia is trading inside a range that has held since spring. Its record intraday high is $236.54, set on May 14, with a record close of $235.20 that same day, and the stock has not been able to clear that area since, including a failed push on September 4. Friday's $222.27 close sits about 6.03% below the intraday record and roughly 2.50% below the August 27 close of $227.98. The 52-week low is $164.27, and beta is 1.64, so the stock tends to move more than the broader market.

The trend structure is constructive. As of September 10, the 50-day simple moving average was near $211.80 and the 200-day simple moving average near $197.09, with the price above both, and the 14-day RSI sat around 54, a neutral reading that leaves room to climb before nearing overbought territory. The 25-day Bollinger Bands spanned roughly $214.97 to $226.07 at that point.

Resistance starts at the August 27 close of $227.98, followed by the September 4 close of $230.36 and then the $236.54 record. Support begins near Friday's low of about $218, followed by the lower Bollinger band near $214.97, the 50-day average near $211.80, and the $209.66 pre-announcement close that anchors the entire August rally. A decisive break below $209.66 would erase the AWS-and-earnings gap and shift the debate toward the deeper $197 area, where the 200-day average sits.

 

The bull case treats the AWS deal as proof that demand is contracted, not speculative. Management said Nvidia has supply for only about 70% of expected demand, which supports pricing power, and FY2028 EPS consensus has risen from $12.6718 to $15.5675 over 90 days, with 39 upward revisions in the last 30 days and none cut. Mizuho raised its price target from $300 to $315 with an Outperform rating, forecast fiscal 2028 revenue near $700 billion versus a $574 billion consensus, and estimated Vera Rubin could contribute about 20% of October-quarter revenue. The AWS package also widens Nvidia's footprint beyond GPUs into CPUs, networking, memory technology, and federal work, which makes its position harder to displace.

The bear case starts with how the buildout is being paid for. Amazon's trailing free cash flow has turned negative $7.6 billion as capital spending climbs, and when Morgan Stanley initiated credit coverage of Nvidia on August 24, credit analyst Lindsay Tyler said the long-term risk tied to financing expensive AI chips remains hard to quantify. Goldman Sachs analyst James Schneider raised his price target from $285 to $300 but kept a Neutral rating and expects the shares to be range bound after a quarter that met elevated expectations. Nvidia's gross margin is guided down to 74% in the current quarter, and Mizuho's note flagged a further decline toward 71% to 72% as memory and wafer costs rise. There is also the platform question, since the same AWS deal extends NVLink Fusion to Amazon's own Trainium chips, a reminder that Nvidia's largest customers are building alternatives while they buy from it.

 

Macro pressure is the immediate risk. The Federal Reserve raised interest rates on September 16 and signaled more hikes ahead, the 10-year Treasury yield touched 5% this week, and oil is near $100 a barrel. High-multiple AI names have been sensitive to each of those moves, and Nvidia's failure to reclaim $236.54 while yields climbed is consistent with a market that wants proof before paying more.

Competitive and regulatory headlines add a second layer. Huawei announced it will launch its Ascend 960DT in the first quarter of 2027, earlier than previously planned, and China remains outside Nvidia's forward guidance. California Governor Gavin Newsom signed an executive order on September 18 aimed at reining in AI companies, and Kress sold 34.9 thousand shares worth $7.65 million on September 17, a disclosure that adds to sentiment noise. Traders using $209.66 and the $211.80 50-day average as reference levels can define risk before the next earnings report on November 25, while those waiting for confirmation may prefer to see a sustained close above $236.54 before treating the AWS-driven jump as a new trend rather than a range high.

 

Nvidia's August jump came from a rare combination of blowout results, aggressive guidance, and the largest AWS commitment yet, and four weeks later the stock has held roughly 6.01% above its pre-announcement level despite a hostile rate backdrop. The debate now is whether 2 million more GPUs, $279 billion in supply commitments, and a 70% growth outlook are enough to carry the shares through rising yields, rising rivals, and shrinking margins. With $209.66 as the base the rally was built on and $236.54 as the ceiling that has held since May, will Nvidia's November 25 report prove that locked-in hyperscaler demand can outrun the macro pressure, or has the market already priced in the good news?

 

A: On August 26, 2026, AWS and Nvidia announced plans to deploy 2 million additional Nvidia Blackwell Ultra, Rubin and Rubin Ultra GPUs across AWS infrastructure in 2027 and 2028. The expansion also brings Vera CPUs to AWS, extends NVLink Fusion to Amazon's Trainium chips, and includes 100,000 GPUs for U.S. government AI factories.

A: Nvidia rose 8.74% to $227.98 after reporting $96.2 billion in fiscal second-quarter revenue, guiding fiscal 2028 revenue growth to about 70%, and announcing the AWS expansion the same evening. Analysts credited the earnings and guidance for most of the move, with the AWS commitment reinforcing demand.

A: Nvidia closed at $222.27 on September 18, 2026, about 6.03% below its record intraday high of $236.54 and 5.50% below its record close of $235.20, both set on May 14, 2026. It is roughly 6.01% above the $209.66 close from August 26.

A: The average target is $328.66, with 9 Strong Buy ratings, 48 Buy ratings, 2 Hold ratings, and 1 Sell rating. Goldman Sachs' James Schneider has a $300 target with a Neutral rating, while Mizuho has a $315 target with an Outperform rating.

A: Nvidia's next earnings report is scheduled for November 25, 2026. Key risks include Federal Reserve rate hikes, a 10-year Treasury yield near 5%, a guided gross margin decline to 74%, Huawei's accelerated Ascend 960DT launch, and financing and custom-chip risks tied to its largest hyperscaler customers.