Street View: Amazon's cloud strength to offset AI spending concerns
AMZN•Amazon's cloud growth eases AI spending concerns
Amazon AMZN.O delivered its strongest cloud growth in more than four years and raised its annual capital spending forecast, bolstering its argument that heavy investment in AI is generating sufficient demand to warrant the outlays.
Shares were up 12.1% at $264.02 in premarket trading.
Analysts point to AWS re-acceleration and AI demand
- Canaccord Genuity (
buy, PT: $330) says, "the market is rewarding evidence, with AWS re-accelerating as margins expand, demand visibly outrunning capacity into 2027, and enterprise inference adoption still early" - J.P. Morgan (
overweight, PT: $365) says it is encouraged by strength in the core cloud business, which is closely tied to AI revenue, and sees demand grow further as AI workloads move into production - Pivotal Research (
buy, PT: $333) sees a "long runway" for growth in the cloud segment, driven by businesses moving to the cloud, that should be enhanced by co's AI offerings - RBC Capital Markets (
outperform, PT: $330) says AI investments may not be the "ROIC depressant it's been made out to be" as evidenced by Amazon's results
