Amazon has launched its new “sovereign cloud” service in Europe, aiming to stay competitive in a market where regulators are putting greater pressure on Big Tech.

The offering is designed for organisations that want cloud services where data is stored and managed within a specific jurisdiction, without being moved elsewhere.

The move comes as the European Union continues to push companies operating in the bloc to comply with stricter privacy and data rules.

These efforts have been driven by growing concerns in Europe over the dominance of US tech giants in cloud infrastructure, and fears about potential access to sensitive European data.

Why Europe is demanding sovereign cloud services

The term “sovereign cloud” broadly refers to cloud computing services where customer data is stored, processed, and handled within a specific country or legal region.

In Europe, demand for these services has increased as governments, regulators, and businesses focus more on data residency and control.

The EU has pushed for stronger compliance with its data and privacy regulations, especially as concerns rise about US-based tech companies dominating the cloud sector.

European policymakers have also highlighted the risk that foreign-controlled cloud systems could give outside authorities access to European citizens’ information.

AWS builds a separate cloud region in Germany

The Amazon Web Services European Sovereign Cloud is based in Brandenburg, Germany, and was first announced in 2023. Amazon says this system is physically and logically separate from other AWS cloud regions.

To support that structure, Amazon has created a new parent company for the sovereign cloud. It will be locally controlled within the EU and run by EU citizens, according to the company.

Stéphane Israël will lead the AWS European Sovereign Cloud.

Stefan Hoechbauer, vice president of AWS global sales for Germany and Europe Central, has been appointed as a managing director.

AWS also announced five new members of an advisory board for the sovereign cloud, three of whom are Amazon employees.

How AWS is addressing EU control and resilience

Amazon said the sovereign cloud has no critical dependencies on non-EU infrastructure. The company also said it can continue operating even in the event of a communications disruption with the rest of the world.

AWS said that under extreme circumstances, authorised AWS employees working on the AWS European Sovereign Cloud, who are EU residents, will have independent access to a replica of the source code needed to maintain AWS European Sovereign Cloud services.

In recent years, European regulators and politicians have raised concerns about reliance on US tech firms for critical digital infrastructure.

Even as the EU encourages regional alternatives, AWS, Microsoft, and Google still control a large share of the market.

Expansion plans come amid EU cloud scrutiny

The sovereign cloud launch comes as European regulators investigate cloud services from Amazon and Microsoft under the Digital Markets Act, which is designed to limit the power of major tech firms.

AWS, Microsoft, and Google account for around 70% of the cloud computing market in Europe, according to Synergy Research Group.

In 2024, Amazon said it would invest 7.8 billion euros ($9.1 billion) into the AWS European Sovereign Cloud in Germany through 2040.

Amazon said it would expand the AWS European Sovereign Cloud to Belgium, the Netherlands, and Portugal.

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Ericsson AB is preparing to cut about 1,600 jobs as it pushes ahead with efforts to reduce operational costs.

The Swedish network equipment supplier said on Thursday that the cuts will affect its workforce in Sweden and that it has entered negotiations with unions.

The decision adds to a wider cost-cutting drive at Ericsson, as the company works to protect margins in a telecom equipment market that has stayed weak for longer than expected.

It also reflects how network suppliers are still adjusting to slower spending cycles from mobile operators.

Swedish workforce cuts move to centre stage

Ericsson confirmed the planned job reductions will impact employees in Sweden, marking a major cost action within its home market.

The company said the process has moved into discussions with unions, which is a key step in restructuring plans that affect Swedish staff.

For Ericsson, Sweden remains central to its operations, making the planned 1,600 job cuts a notable part of its ongoing effort to reshape costs across the business.

The move suggests that savings measures are not limited to smaller markets, but also include core locations.

Telecom equipment slowdown keeps pressure on suppliers

Ericsson has been trying to cut costs and improve margins during a difficult period for telecom network suppliers.

The sector has struggled for years as demand weakened and operators held back on major investments.

A Bloomberg report notes that a key issue has been that carrier spending linked to 5G technology did not arrive at the level many in the industry had anticipated.

With a slower pace of network upgrades, equipment suppliers have faced tougher sales conditions and a more competitive market environment.

Ericsson’s Nordic rival Nokia Oyj, has also struggled under the same market pressures, showing the slowdown has affected multiple major suppliers across the region.

Layoffs follow earlier restructuring plan

The latest cuts build on Ericsson’s earlier restructuring efforts.

In 2023, the company announced a global plan to cut 8,500 jobs, which was equal to about 8% of its workforce at the time.

Since then, the company has continued reducing staff levels. Ericsson axed hundreds of employees in Spain and Canada last year, keeping the restructuring process active beyond the initial global announcement.

With the new cuts now focused on Sweden, Ericsson appears to be extending that multi-year plan to reduce costs and support profitability while demand remains under pressure.

Share performance shows market uncertainty

Ericsson’s restructuring moves come at a time when investor confidence has been tested.

The company’s share price has fallen about 8.5% over the past 12 months.

That decline reflects the ongoing challenges across the telecom equipment market, including slower carrier spending, weaker demand, and the need for suppliers to keep tightening their operations.

For Ericsson, cutting jobs is one way to respond to these conditions as it continues to manage costs.

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India’s latest trade numbers show a mixed picture, with exports staying in positive territory while imports climbed at a much faster pace.

The data points to steady demand for some Indian goods overseas, even as key exporters continue to face obstacles in the US market.

December also underlined how quickly the trade balance can shift when import bills rise faster than export earnings.

With the trade deficit widening again, the focus is now on what this trend could mean for the rupee at a time when investors are watching capital flows and the pace of trade negotiations closely.

Export growth steadies after a strong November

India’s exports rose 1.9% in December from a year earlier to $38.51 billion, according to data released by the Ministry of Commerce and Industry on Thursday.

The increase marked the second consecutive month of growth.

However, it followed a much sharper jump in November, when exports climbed 19.4%, the fastest pace in more than three years.

The latest release shows export momentum remains intact, but at a more moderate level compared with the previous month.

New markets help soften global turbulence

The ministry data suggested India’s export resilience has been supported by its stronger push into markets in the Middle East and North Africa.

This shift has helped exporters manage uncertainty in global trade conditions.

Commerce Secretary Rajesh Agrawal told reporters in New Delhi that India’s exports have held up well despite global turmoil.

He also pointed to strong performance in sectors such as electronics, pharmaceuticals, and engineering.

US tariffs remain a key hurdle for labour-heavy sectors

The trade figures arrive as India continues to negotiate with the US, one of the few major economies yet to finalise a trade deal with Washington despite months of discussions.

The US has targeted India with tariffs of 50%, among the highest in the world, partly linked to India’s purchases of Russian oil.

Exporters in labour-intensive industries have warned that a longer delay in reaching a deal could hit demand and cost them orders tied to the US summer shopping season.

Import jump widens deficit and adds rupee pressure

Imports rose more sharply than exports in December, climbing 8.8% from a year earlier to $63.55 billion.

With inbound shipments increasing faster than outbound trade, India’s trade deficit widened.

The deficit expanded to $25.04 billion in December, compared with $24.53 billion a month earlier.

A widening gap between imports and exports could add pressure on the already weak rupee, which has been weighed down by capital outflows and uncertainty about the timing of a potential US trade deal.

At the same time, the government has cautioned that monthly trade data can be volatile.

Shifts in shipment timings and customs clearance can affect the final numbers, which means month-to-month changes may not always reflect a lasting trend.

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Every few years, Meta Platforms (NASDAQ: META) forces investors to re-decide what kind of company it really is.

Is it a mature advertising cash machine, or a capital-intensive technology builder chasing the next platform?

After the metaverse detour and the brutal reset of 2022–2023, investors are once again wondering where the company is headed. The difference now is that Meta is approaching its next ambition from a position of operational strength.

The last time Meta asked markets for patience, it burned through credibility as quickly as it burned cash.

Today, the company is still spending aggressively, but the context has changed. Revenues are growing, margins have recovered, and the core business is generating cash flow.

It’s not about survival now, but whether this next big bet will pay off or not.

The advertising engine is stronger than it looks

At the centre of any serious analysis on Meta sits advertising.

More than 98% of revenue still comes from ads, and that concentration is not a weakness in the current environment.

Digital advertising has quietly recovered from the post-pandemic slowdown, and Meta has benefited more than most.

The company enters 2026 with clear momentum. Management guided to fourth-quarter revenue growth of 17-24%, while external trackers suggest the holiday season ran hotter than expected.

It must be noted that Meta has a recent habit of beating the top end of its own guidance.

This is not a speculative story driven by distant promises. It is a company generating close to $200 billion in annual revenue, with earnings power that looks more predictable than it did two years ago.

AI has played a real role here, not as marketing buzz, but as an efficiency tool. Improvements in ad targeting, ranking, and measurement have allowed Meta to extract more value per impression even as regulatory constraints remain tight.

While competition from TikTok and retail media continues, Meta’s scale still gives it a structural edge. The platforms are saturated, but monetization is not.

From a macro angle, advertising tends to follow nominal growth and corporate sentiment, not abstract innovation cycles.

If global growth slows modestly but avoids recession, Meta’s ad business remains well supported.

In that scenario, the downside risk to earnings looks limited unless regulation or competition suddenly turns hostile.

Spending is rising again, but this time with discipline

Investors are understandably nervous about Meta’s spending plans for 2026.

Capital expenditure is set to rise sharply as the company builds out data centers and AI infrastructure. The memory of the metaverse years is still fresh, when spending ran far ahead of returns and management seemed insulated from consequences.

The difference now is that cost control has already been demonstrated. Reality Labs remains deeply loss-making, with operating losses north of $17 billion, but headcount reductions of 10-15% show that this unit is no longer sacred.

According to recent reports, Meta is planning to layoff 1500 people from its Metaverse division.

That alone could free up hundreds of millions in annual savings. More importantly, it signals that Meta is willing to admit when an experiment is not scaling fast enough.

The renewed investment focus sits elsewhere.

Meta Compute, large-scale data centers, and long-term power sourcing are designed to support AI workloads that already exist, not speculative virtual worlds.

Zuckerberg’s stated ambition to move from roughly 5 gigawatts of capacity today to tens of gigawatts over the decade is bold, but it aligns with what peers are doing.

The nuclear power agreements are not ideological statements. They are a response to a real constraint that AI is energy-hungry, and grid access has become a competitive bottleneck.

But all this is rational behavior. Energy, compute, and land availability are becoming strategic assets for technology companies, much like distribution once was.

Meta is trying to lock in optionality early, even if returns are back-loaded.

That does not guarantee success, but it is a clearer economic bet than the metaverse ever was.

Wearables and AI are optionality, not the core thesis

AR glasses and consumer AI features attract headlines, but they should not be treated as the central reason to own the stock.

The Ray-Ban glasses appear to be selling better than expected, and potential production increases with EssilorLuxottica suggest real consumer interest.

Over time, this could evolve into a meaningful hardware platform.

However, in financial terms, this remains an optional upside. Even optimistic scenarios do not move the needle on Meta’s income statement in the next two years.

The same applies to generative AI products embedded across Instagram, Facebook, and WhatsApp.

These features improve engagement and ad performance, but they do not yet create a new revenue category.

This framing is important for valuation discipline. Meta does not need AR glasses or consumer AI to justify its current earnings multiple.

They are call options layered on top of a mature, profitable base.

That reduces the risk of disappointment. If these bets fail, Meta is still a dominant advertising company with enormous cash flow. If they succeed, upside emerges without requiring heroic assumptions.

Valuation, risks, and the bull case in plain terms

At around the low $600s, Meta trades at a premium to its own history, but not at an extreme level given expected earnings of roughly $29 per share.

The market is effectively pricing Meta as a high-quality large-cap growth company with elevated capital intensity. That is a fair description.

The main risks are familiar. Regulatory pressure never disappears, especially in Europe.

Heavy AI spending could outpace monetization if the global economy weakens. Competition for attention remains fierce.

These are not theoretical concerns, but they are also not new ones.

Recent reports revealed that Meta earns substantial revenue from ads linked to fraudulent content, raising ethical and platform safety concerns.

The bull case rests on something simpler. Meta has restored its operating discipline, its core business is growing again, and its next investment cycle is tied to infrastructure that the entire industry agrees is necessary.

In that context, being bullish does not require believing in science fiction. It requires believing that Meta can keep executing at a level it has already shown in the past two years.

Rosenblatt analyst Barton Crocket says:

“Meta’s recent moves look deliberate and sensible, positioning the company to support long-term AI ambitions while managing spending fears.”

The analyst has issued a “Buy” rating with a $1117 price forecast, which implies more than 70% upside from the current price.

From a fundamental, macro-aware perspective, that assessment is not irrational. Meta is not cheap, but it is credible again. In markets like this, credibility is often the most underappreciated asset.

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Microsoft (NASDAQ: MSFT) has announced a five-pillar “Community-First AI Infrastructure” plan to ease local concerns about its expanding data centre footprint.

The announcement comes at a time when MSFT has been grappling with weakness, with shares currently down some 13% versus their 52-week high.

Here’s an explanation of what Microsoft is offering local communities under its new initiative.  

Paying its way on power

Microsoft’s first promise tackles the most visible concern: electricity costs. Communities fear that massive artificial intelligence (AI) data centers will drive up local utility bills.

But MSFT has now pledged to “pay its way,” covering its full power cost and working with utilities to expand grid capacity.

The tech titan insists that residents won’t subsidize its energy appetite – a vow that’s both symbolic and practical.

It signals Microsoft’s willingness to shoulder the financial burden of its infrastructure, while also ensuring that local households and businesses aren’t squeezed by higher rates.

Water stewardship

Microsoft’s second promise addresses water concerns – another flashpoint in data centre debates.

Cooling servers requires enormous amounts of water, raising fears of shortages. But MSFT has promised to replenish more water than its facilities consume, effectively giving back to local ecosystems.

Importantly, the multinational dubbed transparency as “central”: it will publish water-use data for each US data centre region.

This positions Microsoft as a responsible steward, aiming to reassure communities that growth in AI infrastructure won’t come at the expense of their most vital resource.

Rejecting tax breaks

Next, Microsoft vowed to reject local property tax breaks, a common incentive offered to lure big tech projects.

While rivals often negotiate subsidies, MSFT is signaling that it doesn’t want to be seen as draining public coffers. By paying its full share of local taxes, the company hopes to build goodwill and avoid accusations of exploiting communities.

This stance reflects a broader shift: tech giants are realizing that civic trust is just as “valuable” as financial incentives.

Microsoft is betting that transparency and fairness will smooth the path for its ambitious AI buildout.

Jobs and training

The fourth pillar of Microsoft’s “Community-First AI Infrastructure” initiative focuses on people.

MSFT pledged to train local workers and invest in AI education programs, ensuring communities benefit directly from the infrastructure boom.

The company wants to position data centers not just as industrial monoliths, but as catalysts for opportunity.

By equipping residents with skills for the AI economy, the Nasdaq-listed firm is essentially trying to counter fears that automation will hollow out jobs.

This promise reframes the narrative: instead of outsiders extracting value, Microsoft wants to be seen as a partner in workforce development.

Community engagement and transparency

Finally, Microsoft has committed to ongoing transparency and community engagement.

The company will report progress publicly, from water replenishment to energy commitments, and maintain dialogue with local stakeholders.

This is entirely about trust: convincing communities that MSFT’s presence will be a net positive.

Brad Smith, Microsoft’s president, framed it as a civic responsibility – agreeing that infrastructure projects succeed only when locals believe the benefits outweigh the costs.

By embedding accountability into its expansion, Microsoft hopes to set a precedent for how tech companies build at scale.

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European markets ended Tuesday slightly lower as rising Iran tensions and political uncertainty in the US kept investors on edge.

The BBC is also fighting back in court, seeking to dismiss President Trump’s $10 billion defamation lawsuit on jurisdiction and “actual malice” grounds.

Meanwhile, Spain moved to tighten rules on AI deepfakes, setting tougher consent standards and stronger protections for minors.

In France, farmers intensified protests against the EU-Mercosur trade deal ahead of key votes.

European stock slips amid Iran-Powell jitters

European equities finished Tuesday’s session in cautious retreat, with the Stoxx 600 sliding 0.2% as geopolitical tensions in Iran and an escalating criminal investigation into Federal Reserve Chair Jerome Powell rattled investor sentiment.

Major regional exchanges reflected the broader hesitation, each moving in different directions amid the crosscurrents of policy uncertainty and political drama unfolding stateside.

However, not all stocks surrendered ground. Danish renewable energy firm Orsted surged 5.4% after a US court sided with the company, clearing it to resume a suspended $5 billion offshore wind project that had become collateral damage in the Trump administration’s energy pivot.

The mixed close underscores how macro headwinds are clashing with sector-specific tailwinds in an increasingly fragmented market.

BBC seeks dismissal of Trump suit

The BBC moved Monday to have President Trump’s $10 billion defamation lawsuit dismissed, signaling an aggressive courtroom strategy.

Filed in Miami federal court, the motion challenges the judge’s jurisdiction, arguing the documentary, which aired in Britain, not Florida, cannot trigger US legal liability.

The broadcaster’s legal team contends Trump suffered zero damages: he won reelection decisively and carried Florida by 13 points after the broadcast aired.

Moreover, the BBC disputes Trump’s claim that the program appeared on BritBox, stating it was never available there.

The real jaw-clencher: the BBC maintains Trump can’t prove “actual malice,” a stringent legal test required for public figures seeking defamation damages.

A decision on the dismissal motion looms in March, with trial potentially set for 2027 if the case proceeds.

Spain cracks down on deepfakes

Spain’s cabinet has thrown down the gauntlet against AI-generated deepfakes, approving draft legislation Tuesday that sets strict consent rules and bolsters child protection online.

The law sets 16 as the minimum age for valid consent to use someone’s image, preventing minors’ photos shared innocently on social media from being weaponized by bad actors.

More sweeping: posting a family photo online no longer grants blanket permission to repurpose it in any context.

Commercial use of AI-generated images or voices without explicit consent becomes illegal, unless it’s clearly labeled as satirical content involving public figures.

The move reflects Europe’s broader awakening: the EU mandates that member states criminalize non-consensual sexual deepfakes by 2027.

Spain’s legislation still requires public consultation before parliament votes, but it signals serious intent to stay ahead of the AI deepfake curve.​

French farmers protest Mercosur deal

Some 350 French tractors rumbled through Paris on Tuesday morning in a second rebellion within five days against the EU-Mercosur trade agreement set for Saturday’s signing in Paraguay.

The FNSEA farm union led convoys past iconic landmarks, the Arc de Triomphe, Champs-Elysées, and National Assembly, hammering home a message: South American beef and agricultural products threaten France’s livelihood and food security.

Farmers face a squeeze from rising fuel and fertilizer costs, tighter environmental rules, and price pressure from retailers that Mercosur deepens by flooding EU markets with cheaper imports produced under laxer standards.

Though President Macron opposes the deal, most EU member states backed it last week.

The European Parliament votes next week, and farmers plan another Strasbourg demonstration on January 20 to lobby MEPs directly.​​

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Markets wrapped the day, juggling easing inflation, central bank politics, and rising geopolitical risk.

A cooler US CPI print revived expectations for earlier Fed rate cuts, while an unusual alliance of global policymakers and Wall Street leaders rallied behind Chair Jerome Powell amid signs of political pressure.

Meanwhile, oil surged as Washington hardened its posture toward Iran, adding a fresh risk premium to crude.

The fallout is spreading to trade, with India’s rice exports to Iran slowing sharply as unrest and sanctions fears curb demand.

Cool CPI reignites Fed cut bets

The December CPI report delivered relief to markets betting on interest rate cuts.

Core inflation clocked in at 2.6% annually, a meaningful slowdown that undercut economist forecasts and suggests price pressures are finally easing after months of stubborn readings.

The softer-than-expected data reignited Fed cut speculation, with traders now pricing in lower rates sooner than previously anticipated.

This marks a critical inflection point for monetary policy.

If the trend holds through January and February, the Fed could begin its cutting cycle by spring, potentially supporting equities and bonds simultaneously.

Wall Street’s reaction will hinge on whether this dip signals genuine disinflation or merely a temporary pause in climbing prices.

Global heavyweights rally behind Powell

Fed Chair Jerome Powell is getting unexpected armor from an unlikely coalition.

Global central bank heads and Wall Street titans are rallying behind him as the Trump administration signals potential pressure on his leadership.

The show of support underscores Powell’s credibility on the international stage; his measured approach to inflation and rate cuts has earned respect across borders.

For Powell, this backing matters politically; it raises the reputational cost of any administration moves against him.

The unified stance also signals confidence in the Fed’s independence, a cornerstone of market stability.

Oil surges on Iran escalation fears

Oil rallied hard on Trump’s Iran pivot.

A 3% jump reflects immediate market conviction that tensions in the Middle East are escalating, and canceled diplomatic talks with Tehran signal a tougher stance that could disrupt crude supplies or trigger regional instability.

Traders priced in geopolitical risk premiums instantly.

The “help is on the way” messaging to protesters adds another layer: it hints at potential US intervention or sanctions tightening, both bearish for global oil flows.

Energy stocks caught the bid alongside crude futures.

Iran turmoil hits India’s rice exports

India’s rice export engine to Iran is sputtering.

Street protests and tariff uncertainty are freezing buyer appetite just as New Delhi counts on these shipments for foreign exchange and farm support.

Iran, a top destination for Indian rice, is pulling back amid domestic unrest and potential US sanctions escalation, both dampen import demand.

For Indian farmers and exporters, this is a headache: rice stockpiles could build, pressuring domestic prices and rural incomes.

The broader play: geopolitical risk is reshaping trade flows in real time.

India’s agricultural sector, already vulnerable to monsoon swings, now faces demand shocks tied to Middle East tensions.

Policy clarity is urgently needed to stabilize farmer confidence and export projections.

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The S&P 500 dipped 0.3% at midday on Tuesday as investors digested JPMorgan Chase’s mixed earnings report and grappled with ongoing policy uncertainty tied to President Trump’s recent proposals.

JPMorgan stock tumbled 3% despite beating expectations on profit and revenue, a move that underscored how earnings beats can be overshadowed by weaker guidance and broader market caution.​

US stocks midday: Mixed earnings and market selloff

JPMorgan reported adjusted fourth-quarter earnings per share of $5.23, surpassing the consensus estimate of $4.86 and representing a 7.6% beat.

The bank’s managed revenue reached $46.8 billion, exceeding the consensus projection of $46.25 billion.

Net interest income climbed 7% year-over-year to $25.1 billion, reflecting the bank’s pricing power in lending despite the uncertain interest-rate environment.​

Yet the market rewarded this outperformance with a sell-off.

JPMorgan shares tumbled from $324.46 at Monday’s close to $315.93 by midday Tuesday, representing a 2.6 to 3% decline despite the earnings beat.

The culprit was clear: investment banking fees fell 5% in the quarter to $2.35 billion, disappointing investors who had expected mid-single-digit growth after a record 2024 deal-making environment.​​

The broader market reflected the banking sector’s weakness.

The S&P 500 fell 0.4% midday, while the Dow Jones Industrial Average slipped 399 points, or roughly 0.8%, and the Nasdaq Composite declined 0.2%.

Both the S&P and Dow were coming off all-time closing highs set on Monday, leaving the market vulnerable to profit-taking and risk-off sentiment.​

Beyond JPMorgan, other financial stocks weighed on indices.

Delta Air Lines fell 3.3% despite beating fourth-quarter profit expectations, as its 2026 guidance disappointed investors and revenue missed estimates.

Policy uncertainty dampens risk appetite

The midday weakness reflected mounting investor anxiety over Trump administration proposals.

While credit card stocks stabilized overnight after Monday’s brutal selloff tied to Trump’s 10% interest-rate cap proposal, financial sector vulnerability remained a theme.

The broader concern centered on policy execution risk: would Trump’s proposals become law, and if so, how would they reshape bank profitability and credit availability?​

Additionally, ongoing tensions between Trump and Federal Reserve Chair Jerome Powell, including the recent DOJ criminal investigation into Powell, continued to weigh on sentiment.

Investors worried that threats to Fed independence could ultimately trigger higher inflation and market volatility if monetary policy becomes politicized.​

December consumer inflation data came in line with expectations, with the Consumer Price Index rising 2.7% year-over-year and core inflation at 2.6%, the lowest since 2021.

The softer-than-feared inflation print offered some relief and lifted Treasury yields slightly, with the 10-year yield easing to 4.17%.​

Investors will watch earnings reports from Bank of America, Citigroup, and Wells Fargo later this week to gauge whether JPMorgan’s investment banking weakness is sector-wide.

Meanwhile, the market’s ability to break away from policy headlines and focus on fundamentals will likely determine whether Tuesday’s midday decline becomes a broader pullback or a brief correction before renewed strength.

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Advanced Micro Devices (NASDAQ: AMD stock) jumped approximately 7% in midday trading on Tuesday after KeyBanc analyst John Vinh upgraded the chipmaker to Overweight from Sector Weight.

The analyst raised his 12-month price target to $270, implying 30% upside, citing supply constraints that have left AMD’s server CPUs nearly sold out for 2026.

Moreover, the analyst also sees stronger-than-expected early demand for its AI accelerators.​

AMD stock: Supply squeeze and pricing power drive bull case

KeyBanc’s upgrade came after a supply-chain trip to Asia, where Vinh documented what he called “outsized hyperscaler demand” for AMD’s data-center and AI products.

The upgrade marks a dramatic reversal from his April 2025 downgrade when he worried about an “air pocket” in demand between product cycles.

The latest findings suggest that major cloud providers like Amazon, Google, and Meta are ramping AI infrastructure investments so aggressively that they have effectively cornered AMD’s supply of high-end server CPUs for the entire year.​

More significantly, Vinh noted that AMD is considering raising prices on server CPUs by 10 to 15% in the first quarter, a move enabled by the supply tightness.

For context, this pricing leverage is particularly important because it suggests AMD can grow revenue faster than pure volume growth would indicate.

KeyBanc’s base case projects AMD’s server CPU business will grow at least 50% in 2026, driven by continued hyperscaler demand and the adoption of the company’s fifth-generation EPYC Turin processors.

Beyond the CPU business, Vinh sees AI-related revenue reaching $14 billion to $15 billion in 2026, a figure that would position AMD as the second-largest AI accelerator player after Nvidia.

This revenue estimate is underpinned by early shipments of the MI355 accelerator in the first half and a “significant ramp” of the MI455 accelerator in the second half.​

Risk factors and execution challenges

Despite the bullish setup, several risks warrant scrutiny.

KeyBanc acknowledged that AMD’s ability to actually deliver and sell its Helios racks, the company’s answer to Nvidia’s NVL72 platform, remains unproven and represents significant execution risk.

Additionally, while AMD has gained ground on Nvidia in cost-effective AI solutions through its open-source ROCm software stack, Nvidia retains commanding market share and customer lock-in that could constrain AMD’s ability to capture the full upside of this cycle.​

Competition from Nvidia and potential supply-chain disruptions also loom.

Vinh himself noted that while hyperscaler demand is surging, macro conditions could shift if capital spending plans change or if yield issues emerge in manufacturing.

AMD’s Q4 2025 earnings release on February 3, 2026, will be the critical near-term catalyst.

Investors will scrutinize management commentary on server CPU supply, the MI355 sales pipeline, and the Helios ramp timing.

Confirmation that AMD’s server CPUs are indeed sold out and that pricing increases are materializing would validate KeyBanc’s thesis and likely extend the stock’s rally.​

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The Nikkei 225 Index continued its strong rally this week, reaching its highest level on record as the “Takaichi trade” accelerated. Its surge coincided with the ongoing Japanese yen crash. It jumped to a record high of ¥54,435, up by 76% from its lowest point in April last year.

Japan stocks jump as the “Takaichi trade” continues

The Nikkei 225 Index, which tracks the biggest Japanese companies, has been in a strong bull run this year. This rally is part of the so-called “Takaichi trade”, which is named after the Japanese Prime Minister.

Takaichi’s policies have mirrored those of Shinzo Abe, who preferred low interest rates and more government spending. She has already requested billions of dollars in a stimulus package meant to support the economy.

Meanwhile, there are rumors that Takaichi will call for a snap election soon, as she seeks full mandate to lead. She has enjoyed high approval rates since becoming the Prime Minister in October, meaning that she has a good chance of winning by a landslide.

The Nikkei 225 Index and the Topix are also benefiting from the ongoing yen devaluation. Data shows that the USD/JPY exchange rate surged to 159.8, a few points below 162, the highest point in July 2024. It has soared by over 13% from its lowest level in April last year.

A weaker yen normally boosts many Japanese companies that sell products abroad. For one, it makes their products cheaper abroad and then helps to boost exporter profits over time. 

The yen is crashing as concerns that Takaichi’s policies will worsen the country’s finances. This explains why yields of the super-long bonds jumped to record levels. 

South Korea and Japan relations

The Nikkei 225 Index is also soaring as Takaichi courts South Korea as tensions with China continue. The crisis between China and South Korea started after she suggested that her country would be willing to support Taiwan in case of an invasion. 

Takaichi said that she hopes to see more cooperation with South Korea after meeting with President Lee Jae Myung in Tokyo. She said:

“There will be further talks between relevant departments to deepen cooperation, both in terms of the economy and economic security, in ways that are strategic and beneficial to both sides.”

With all this happening, investors are now focusing on the Bank of Japan (BoJ). After hiking rates in December, analysts now expect more tightening in April.

The ongoing Nikkei 225 Index rally also mirrors that of ther Asian indices. For example, South Korea’s Kospi Index has jumped to a record high this year, continuing a trend it started last year. Hong Kong’s Hang Seng Index has also soared.

The best-performing stocks were Toho Zinc, Yaskawa Electric, Shiseido, and Mitsui Mining & Smelting. All these stocks have jumped by over 5% on Wednesday.

Nikkei 225 Index technical analysis

The daily chart shows that the Nikkei 225 Index has soared to a record high. This surge happened after it formed a bullish pennant pattern, which is made up of a vertical line and a symmetrical triangle. It has moved above the important resistance at ¥52,590, its highest point on November 4.

Therefore, the index will likely continue rising as bulls target the key resistance level at ¥55,000. A move below the support at ¥52,590 will invalidate the bullish view.

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