Amazon’s (AMZN) cloud computing services business, Amazon Web Services (AWS), is joining in on the artificial intelligence (AI) trend with the announcement of Amazon Nova. This is a new generation of foundation models (FMs) that are available through Amazon Bedrock.
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Amazon Nova launches with three understanding models with varying capabilities. The lowest tier is Amazon Nova Micro, Amazon Nova Lite is next with stronger performance, and Amazon Nova Pro is the strongest model available at the moment. The company also intends to introduce Amazon Nova Premier in early 2025. This will be the most powerful of the new understanding FMs.
Amazon Web Services is also releasing generative FMs through the Nova platform. Amazon Nova Canvas covers AI image generation, while Amazon Nova Reel is a video generation model. The pricing for the FMs will follow Amazon Bedrock’s pay-as-you-go structure.
What AI Models Mean for Amazon
With the launch of Amazon Nova, the e-commerce and tech giant is joining in on a growing market of customizable AI. The company has been criticized for not exercising this option sooner, with its wealth of data centers making it a prime candidate for the AI race.
While Amazon may not have struck while the iron is hot, its offerings show it’s no slouch in the AI department. The abilities of its FMs appear comparable to rivals and will likely improve with time. This could help cement it as a leader in the space, challenging the likes of Microsoft-backed OpenAI (MSFT) and Midjourney.
Amazon is also putting a major focus on business use of its Nova FMs. That includes Nova Pro’s ability to analyze documents, videos, and images. This could be a boon to businesses using Nova to increase productivity and help bring more customers to AWS.
Is AMZN Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Amazon is Strong Buy based on 45 Buy and a single Hold rating over the last three months. With that comes an average price target of $239, a high of $285, and a low of $197. This represents a potential upside of 9.67% for AMZN shares.
