Why Are Nvidia, Amazon, and Apple Shares Rising?

TL;DR

Nvidia agreed to supply 260,000 AI chips to South Korea’s government, research institutes, and major companies as the country develops sovereign AI infrastructure. Amazon shares surged after AWS growth reaccelerated to roughly 20%, while Apple also rose following strong earnings, helping lift technology-focused stock futures.

Transcript

Hello and welcome to Morning Brief Market Sunrise. I'm Ally Canal live from Yahoo Finance's studios in New York City. It's Friday, October 1st. Happy Halloween. And coming up on today's show, President Trump heads home after his high-profile meeting with China Xi Jinping. Be is staying in South Korea for talks with the leaders of both Canada and Ja... Read More

Key Insights

• Nvidia’s South Korean agreement covers 260,000 AI chips for the government, research institutions, Samsung, SK Group, Hyundai, and other organizations. The chips include standard Blackwell products and other Blackwell offerings intended to support the country’s expansion of domestic AI infrastructure.
• Sovereign AI is a strategy in which a nation builds its own supply of GPUs and supporting AI infrastructure. Nvidia has promoted this approach in the Middle East and Europe, and the South Korean agreement adds another major national market to that expansion.
• Nvidia still wants access to China despite expanding elsewhere. Jensen Huang said the United States and Nvidia need to participate in China because the country has 50% of the world’s AI developers, but current restrictions and Chinese policy are limiting chip shipments.
• Amazon’s post-earnings rally reflected renewed confidence in AWS growth and its AI prospects. AWS expanded by roughly 20%, compared with Wall Street’s expectation of about 18%, while Amazon also exceeded both revenue and profit expectations.
• Amazon’s Trainium 2 business has become a multibillion-dollar operation and grew 150% quarter over quarter. The company also completed Project Rainier, which uses 500,000 Trainium 2 chips and gives Amazon additional computing capacity that it can rent to customers.
• AI computing capacity is being consumed rapidly at Amazon, Microsoft, and Google. These companies told investors that new data center infrastructure is being used quickly, supporting their plans to continue or accelerate spending despite the large investment requirements.
• Investor support for AI spending depends on evidence of demand and execution. Markets reacted more favorably when Amazon, Microsoft, and Google linked infrastructure investment to capacity constraints, but Meta shares fell after its spending plans appeared less clearly connected to immediate utilization.
• The United States and China reached a trade truce rather than a major breakthrough. Ian Bremmer said the short meeting stabilized the relationship and avoided a deeper trade conflict, but the longer-term trajectory still points toward decoupling and continued strategic rivalry.

Questions & Answers

Q: What does Nvidia’s South Korean AI chip deal include?

Nvidia agreed to supply 260,000 AI chips to South Korea’s government, research institutes, and major companies, including Samsung, SK Group, and Hyundai. The supply includes standard Blackwell GPUs and other Blackwell products. The agreement supports South Korea’s effort to build sovereign AI infrastructure while giving Nvidia another large market outside China.

Q: What is sovereign AI in Nvidia’s strategy?

Sovereign AI means that a nation develops its own supply of graphics processors and builds domestic infrastructure for training and operating artificial intelligence systems. Nvidia has promoted this concept in the Middle East and Europe, and its South Korean agreement extends the strategy by supplying chips to government bodies, research organizations, and major companies.

Q: Why is Nvidia expanding its AI business outside China?

Nvidia is expanding globally because its access to China remains constrained. The company still wants to operate there, and Jensen Huang said China has 50% of the world’s AI developers. While Nvidia cannot fully serve that market, it is supporting sovereign AI projects in regions including the Middle East, Europe, and South Korea.

Q: Why did Amazon shares rise after its earnings report?

Amazon shares rose nearly 13% in premarket trading because the company exceeded revenue and profit expectations while reporting stronger AWS growth. Wall Street had expected approximately 18% growth from AWS, but the segment delivered roughly 20%. Amazon also expressed confidence in cloud and AI demand despite plans to keep accelerating infrastructure spending.

Q: How is Amazon benefiting from AI through AWS?

Amazon is benefiting through higher AWS growth, strong demand for computing capacity, and its own Trainium processors. Its Trainium 2 business became a multibillion-dollar operation and grew 150% quarter over quarter. Amazon also completed Project Rainier, where 500,000 Trainium 2 chips provide computing capability that can be rented to customers.

Q: How does Anthropic fit into Amazon’s AI strategy?

Amazon has a relationship with Anthropic, which plans to train models using 1 million Trainium 2 chips. However, Anthropic also announced plans to use Google’s TPU chips, so Amazon does not have an exclusive AI advantage comparable to Microsoft’s relationship with OpenAI or Google’s ownership of Gemini, according to the discussion.

Q: Why did investors react differently to Meta’s AI spending?

Meta shares fell after the company said it had accelerated spending for 2025 and expected another meaningful acceleration in 2026. Investors appeared concerned because management did not connect every planned investment to immediate demand as clearly as Amazon, Microsoft, and Google, which emphasized that newly built data center capacity was being consumed quickly.

Q: Was the Trump and Xi Jinping meeting a trade breakthrough?

Ian Bremmer characterized the meeting as a truce, not a breakthrough. It helped stabilize relations and reduce the immediate risk of a trade war, but it did not address Taiwan or Russia. He argued that the broader direction still involves decoupling, export controls, national security competition, and continued strategic rivalry between the United States and China.

Summary & Key Takeaways

• Nvidia announced an agreement to supply 260,000 AI chips to South Korea’s government, research institutes, and major companies, including Samsung, SK Group, and Hyundai. The arrangement advances South Korea’s sovereign AI ambitions while extending Nvidia’s global expansion as restrictions and Chinese policy continue to limit the company’s access to China.

• Amazon shares jumped nearly 13% in premarket trading after the company beat expectations on both revenue and profit. AWS growth reached roughly 20%, exceeding Wall Street’s approximately 18% expectation. Amazon also described strong demand for computing capacity and said its Trainium 2 chip business had become a multibillion-dollar operation.

• Technology earnings produced different investor reactions depending on whether companies connected rising AI investment to current demand. Amazon, Microsoft, and Google emphasized capacity constraints and the rapid use of newly built infrastructure. Meta’s shares fell after management forecast accelerating spending while presenting less certainty about when all the additional capacity would be used.