Amazon ( AMZN ) reported better-than-expected third-quarter results and provided strong guidance. CFRA Research senior equity research analyst Arun Sundaram joins Market Domination Overtime Hosts Alexandra Canal and Josh Lipton to discuss the results and explain why the market is less concerned about Amazon’s artificial intelligence (AI) spending in comparison with its peers.

“Really, you have the ingredients you need to make the stock go up,” Sundaram says.

The analyst explains that while all cloud hyperscalers are increasing their capital expenditures to invest in AI, investors appear less concerned about Amazon’s AI spending compared to Meta (META) and Microsoft (MSFT).

He says, “There are a few unique things” at Amazon, including “Amazon doesn’t just rely on Nvidia chips,” as “they also build and create their own AI chips that are more cost-effective and valuable. So they may not see the same capacity constraints issues that Microsoft currently sees.” Sundaram notes, “The other thing I would point out is, you know, Amazon has multiple levers to grow margins,” including their e-commerce business, advertising, Amazon Web Services and other segments.

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This post was written by Naomi Buchanan.