Nvidia stock soared on Friday as investors reacted to news of increased capex spending by a major cloud provider. Amazon’s fourth-quarter report showed a 14% increase in net sales to $213.4 billion, with AWS revenue up 24% to $35.6 billion. Nvidia’s AI chips are crucial to AWS, positioning the company for potential gains from Amazon’s record capex spending.

Amazon’s strong financial results and plans for record capex spending have implications for Nvidia as a key supplier of AI chips. The long-standing partnership between AWS and Nvidia, along with Amazon’s continued use of Nvidia GPUs, suggests a significant share of the increased spending will likely benefit Nvidia. This positive news bodes well for Nvidia’s future growth and earnings potential.

As investors weigh the implications of Amazon’s financial results and capex plans for Nvidia, it’s important to consider the broader market landscape. While Nvidia has seen significant growth and potential from its AI chips, the stock may not be among the top 10 best stocks identified by the Motley Fool Stock Advisor team. Investors should carefully evaluate their investment decisions and consider the potential risks and rewards of investing in Nvidia at this time.

Read more at NASDAQ: Nvidia Stock Was Squarely in Rally Mode on Friday. Here’s Why.