Amazon’s Cloud Business is facing crucial testing after rivals Microsoft, Google Summing

On By Littum

By Deborah Mary Sophia

(Reuters) -Pressed is at Amazon.com to deliver high expectations for cloud computing in its fourth quarter results on Thursday, after Microsoft and Google’s defective reports moved investor faith on Big Tech’s billion dollars in AI.

Shares of larger tech companies increased over the past two years on the belief that massive data center needs for artificial intelligence technologies would drive investments for years.

But that was before the Chinese start -up Deepseek said it had achieved AI breakthroughs to a fraction of the cost, which precipitated a sale of technology, some say was too late.

Still, Amazon may be better placed than rivals to capitalize on cheaper AI, says analysts because of its massive cloud business and lower exposure to expensive large linguistic models flowing apps like chatgpt.

The company is also ready to release its long -awaited and delayed Alexa Generative Artificial Intelligence Voice Service according to three people who are familiar with the case and have planned a press event for later this month to view it.

Amazon Web Services (AWS), the world’s largest provider of cloud services, is expected to place its strongest income increase in eight quarters of 19.3%, according to data prepared by LSEG.

But Microsoft and Meta were both forced to defend their AI consumption plans last week, and shares of Google-Parent Alphabet fell 8% Wednesday after it said it would spend more on CAPEX than analysts expected.

“Microsoft and Google results have added even more of a microscope on Amazon’s sky -off,” said Dave Wagner, portfolio manager at Aptus Capital Advisors, which has shares in all three technology companies.

“But if Amazon can crush it on their cloud numbers, the market will definitely love that report.”

The company was the first Big Cloud provider to embrace Deepseeks AI models last month and has said its capital costs, mostly on AI, would be more than the $ 75 billion it is estimated until 2024.

Slowting growth by Microsoft Azure and Google Cloud, the second and third largest cloud players, has given rise to caution from analysts about AWS ‘performance.

“Microsoft said it was capacity -limited, Google said it was capacity -limited. More than likely Amazon will say it may also have been capacity -limited, which is why its growth rate is not entirely up to what the market can have Expected, “said Bob O’Donnell, chief analyst at Technalysis Research.

Some analysts see the weakness of rivals as a sign that Amazon may have caught in the AI ​​race through endeavors, including doubling its investment in anthropic and offering a wide selection of AI models on its cloud platform.