Amazon Record High on OpenAI Deal, Palantir Dips

Amazon (AMZN) stock reached a new all-time high on Monday, 3 November, after Amazon Web Services (AWS) inked a $38 billion deal with OpenAI to provide cloud infrastructure. Amazon was a standout performer as the major US indices closed mixed near record highs.

Overnight, Palantir (PLTR) shares dropped despite the firm beating third-quarter earnings estimates and raising guidance for Q4 as investors show some hesitation with the stock up over 170% this year.

TL;DR

• Amazon hit a record high after AWS signed a $38 billion cloud deal with OpenAI.

• OpenAI expands beyond Microsoft, boosting Amazon’s AI ambitions.

• Palantir beat Q3 estimates, but shares fell as investors took profits.

Amazon Signs Big OpenAI Deal

In what is OpenAI’s largest cloud partnership since exiting its exclusive agreement with Microsoft, the AI startup has significantly expanded its access to compute resources. The deal with Amazon, valued at $38 billion, will take effect almost immediately. Under Monday’s agreement, OpenAI will start running workloads on AWS using hundreds of thousands of Nvidia GPUs in the US, with plans to expand capacity over time.

CEO Andy Jassy had already teased more big deals to come in Amazon’s Q3 earnings call last week. Still, investors reacted positively - sending Amazon shares up another 4% on Monday, adding to the 10% gains on Friday, the best two-day gain since 2022.

It’s the latest in a string of ‘mega deals’ centring around the biggest players in artificial intelligence. OpenAI has recently announced about $1.4 trillion in buildout deals with partners including Nvidia (NVDA), Broadcom (BCOM), Oracle (ORCL), and Google (GOOGL).

For Amazon, the deal broadens its scope of involvement with AI, which had previously been concentrated on Chatbot rival Anthropic. Amazon has invested billions in Anthropic and is building an $11 billion data centre campus in New Carlisle, Indiana, dedicated to exclusively hosting its workloads. 

Palantir Stock Volatile Post-Earnings

Palantir beat third-quarter estimates and raised its outlook, citing strong demand for its artificial intelligence software platform. 

While the stock initially responded positively to the good news, it rolled over by around 4% hours, setting up a likely lower open today (Tuesday).

Palantir reported adjusted earnings of $0.21 per share on revenue of $1.18 billion, beating expectations of $0.17 and $1.09 billion. Additionally, the company projected fourth-quarter revenue of approximately $1.33 billion, surpassing the consensus forecast of $1.19 billion. It's the second quarter of Palantir's revenue exceeding $1 billion.

Retail investors have been a major force behind Palantir’s meteoric rise, which began as a meme stock in 2020. The share price has surged roughly 25-fold over the past three years, and while analysts continue to question its lofty valuation, sceptics have so far been proven wrong. (Source: CNBC)

Conclusion

Amazon’s landmark deal with OpenAI underscores how deeply the tech giant is embedding itself in the AI supply chain, from infrastructure to deployment. Palantir, meanwhile, continues to ride investor enthusiasm for AI-driven software, though its soaring valuation keeps markets divided on whether its momentum is sustainable.

*Past performance does not indicate future results. The above are only projections and should not be taken as investment advice.