Amazon AI Spending Boosts Credo, Lumentum Prospects

Amazon, Microsoft, Meta and Alphabet are racing to expand cloud capacity as generative AI drives demand for computing power and faster data movement inside server clusters. The buildout is increasing the need for high-speed, energy-efficient interconnects. Credo, which supplies connectivity chips and active electrical cable technology, and Lumentum, a maker of lasers and optical communications components, are positioned to benefit as hyperscalers upgrade networks supporting AI training and inference.

Amazon reported on July 31, 2025 that second-quarter net sales rose 13% to $167.7 billion for the period ended June 30. Amazon Web Services revenue increased to $30.87 billion, while the cloud unit generated $10.16 billion in operating income. The company maintained plans for roughly $100 billion of capital expenditure in 2025, with spending focused heavily on next-generation AI infrastructure, reinforcing growth prospects for connectivity and optical suppliers including Credo and Lumentum.