Amazon reported a strong second quarter, sending its stock to a record high and briefly pushing its market capitalization above $3 trillion. The article says the result reflected solid demand for AI cloud services, while Microsoft and Alphabet were also increasing capital spending, adding to the view that large technology companies are still committing heavily to artificial intelligence infrastructure.
Big Tech results point to continued AI infrastructure spending
According to the source article, Amazon Web Services posted 37% year-over-year revenue growth in the second quarter, its fastest pace in 18 quarters. Operating cash flow over the past 12 months rose 33%.
Microsoft, for its part, said Azure revenue topped $100 billion, helping annual cloud revenue exceed $214 billion. Alphabet also announced a larger capital expenditure plan aimed at building next-generation infrastructure. The article presented those moves together as evidence that the biggest technology companies are still expanding AI-related investment.
The piece also stated that the discussion was purely a market observation and not investment advice.
Amazon’s earnings and cash flow were cited as support for supplier demand
Within the so-called Magnificent 7 group, Amazon was described in the article as having a “strong buy” analyst rating. Even with heavy spending on AI infrastructure, the company’s operating income came in above market expectations, the report said.
The figures cited in the article showed expected EBITDA growth of 23.47%, above the industry median, and expected operating cash flow growth of 27.69%. Total operating cash flow was listed at $161.4 billion. In the article’s framing, that cash generation could support Amazon’s AI capacity buildout and also create long-term opportunities for suppliers tied to transmission networks and fiber-optic technologies.
Credo highlighted as cloud data traffic drives demand for faster connectivity
As enterprise AI workloads move into the cloud, demand for high-speed data transmission is rising, the article said. It singled out Credo Technology Group (CRDO), which provides high-speed connectivity solutions used to link GPUs, switches and servers, supporting large-scale data movement in cloud computing and hyperscale networks.
On valuation and growth, the article cited an expected PEG ratio of 0.75 for CRDO, nearly 40% below the industry median. It also listed expected EBITDA growth of more than 154% and expected operating cash flow growth of more than 200%.
The article said that if cloud operators continue expanding data centers, suppliers of critical networking components could keep a steady growth trajectory. Credo shares were up 52.46% over the past year and stood at $218.35 as of publication, according to the source text.
Lumentum named as another beneficiary of optical communications demand
The article also pointed to Lumentum Holdings Inc. (LITE), arguing that optical communications have become essential for efficient data transmission in large GPU clusters handling complex workloads. Lumentum was described as a photonics supplier that offers high-speed optical communication products for newer AI data centers, and the piece referred to it as a strategic partner of Nvidia.
The source listed an expected PEG ratio of 0.77 for LITE, more than 38% below peers, expected EBIT growth of nearly 284%, and expected operating cash flow growth of nearly 300%.
It added that while short-term share price swings remain, long-term construction demand from hyperscale data centers could provide a relatively stable operating base for companies with stronger fundamentals. Lumentum shares had gained 101.99% over the past year and were at $779.89 as of publication, the article said.
Related items mentioned in the source
The source also referenced two related Lumentum headlines: one on the company being selected for the Nasdaq-100 Index, and another saying Nvidia had committed $6 billion to photonics startups, with Lumentum rising more than 134%.