Amazon Stock Drops Amid Rate Hike Fears as AWS Secures Historic GPU Order

Amazon's stock price dropped by 2.8% to close at $228 on August 28, 2026, following a week of mixed signals from the company and the Federal Reserve. The decline was largely attributed to the Federal Reserve Chair Kevin Warsh's cautious tone in his Jackson Hole address, signaling that interest rate cuts may not be as imminent as previously thought.

The news overshadowed Amazon Web Services' (AWS) significant announcement of a two-million-GPU order from Nvidia, which is set to power the next generation of inference workloads across its global cloud infrastructure. This move validates AWS's commitment to AI infrastructure and reinforces its position in the market.

Despite the decline, analysts at Morgan Stanley estimate that AWS's AI-related revenue run rate could reach $40 billion by the end of fiscal 2027. The GPU contract is seen as a significant validation of demand for AI infrastructure and highlights Amazon's continued investment in this area.