Key Takeaways
- Amazon (AMZN) shares surged 4.2%, leading gains among the "Magnificent Seven" mega-cap tech stocks as investors reacted to accelerating cloud growth and AI infrastructure demand.
- ECB Governing Council member Boštjan Dolenc stated that a rate increase in September is well-founded, citing persistent inflation that is "not getting better."
- Microsoft (MSFT) and AMD (AMD) have expanded their strategic partnership, with Microsoft set to deploy next-generation AMD Helios AI processors to power frontier model inference on its Azure platform.
- Eurozone inflation risks remain tilted to the upside, with Dolenc warning that policymakers should not delay action while waiting for second-round effects to manifest.
- Market projections suggest the ECB may raise its deposit rate to 2.50% in September to combat energy-driven price pressures stemming from ongoing Middle East conflicts.
Amazon Leads Tech Rally Amid AI Optimism
Amazon (AMZN) saw its stock price climb 4.2% on Friday, outperforming its mega-cap peers in the "Magnificent Seven" group. The rally follows recent data showing that Amazon Web Services (AWS) revenue accelerated to $42.2 billion, its fastest growth in 18 quarters, as the company scales its AI infrastructure to meet "insatiable" demand.
Investors are increasingly confident in Amazon's ability to generate meaningful returns from its massive capital expenditure cycle. The company expects to spend approximately $220 billion on data centers and computing equipment through 2026, with CEO Andy Jassy noting that current capacity is still insufficient to meet the surge in AI-driven workloads.
ECB Official Hardens Hawkish Stance
European Central Bank (ECB) policymaker Boštjan Dolenc delivered a series of hawkish remarks on Friday, asserting that there are clear reasons to support a rate increase in September. Dolenc emphasized that inflation is not showing signs of improvement and cautioned against waiting for second-round effects—such as wage-price spirals—to become visible before tightening policy further.
Dolenc also noted that increasing bond yields may provide some benefits to the financial system's stability, though he looked toward the December projections to provide ultimate clarity on the long-term policy path. Current market pricing suggests a high probability of a 25-basis-point hike at the ECB's September 10 meeting, which would bring the deposit facility rate to 2.50%.
Microsoft and AMD Deepen AI Integration
Microsoft (MSFT) is significantly expanding its use of Advanced Micro Devices (AMD) hardware to bolster its Azure AI infrastructure. The collaboration centers on the deployment of the AMD Helios rack-scale solution, which integrates Instinct MI455X GPUs and 6th Gen EPYC "Venice" CPUs to handle complex AI inference and training tasks.
This partnership aims to provide Azure customers with more diverse hardware options for running large language models and "agentic" AI workloads. The move is seen as a strategic effort by Microsoft to reduce its reliance on a single chip supplier while helping AMD capture a larger share of the lucrative data center market currently dominated by Nvidia (NVDA).
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.