Amazon's AWS Fuels Long-Term AI Growth Opportunity for Micron and Broadcom

Amazon's cloud computing arm, Amazon Web Services (AWS), has been driving growth for the company. As the world's No. 1 cloud services provider, AWS is a key player in the artificial intelligence (AI) market.

AWS offers developers and users of AI a platform to run AI workloads, creating high demand for capacity. In response, major clouds like AWS have invested billions of dollars to build out capacity.

Micron Technology, which provides memory needed for AI to operate correctly, is benefiting from the trend. Demand for various forms of memory has surged, resulting in tight supply and climbing prices, supercharging Micron's revenue growth and stock performance.

Broadcom, a leading provider of networking products, including switches and routers, is also seeing growth driven by AI adoption. The company helps customers build custom chips suited to specific tasks.

In Amazon's latest earnings call, CEO Andy Jassy announced that the company's capital spending for the year would rise to $220 billion, up from $200 billion, to address soaring demand. Jassy stated that even at this amount, they will still not have enough capacity to meet all the demand in 2026 and possibly 2027.

This increased spending on AI infrastructure build-out is expected to translate into more revenue growth for Micron and Broadcom. Jassy also noted that demand for 2028 is 'striking', indicating a long-term trend rather than a short-term spike.