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Amazon rallies on cloud optimism as it chases Microsoft for AI business

Economic Times · 1y

Amazon's stock surged by 7% due to a boost in growth in its highly profitable cloud business, as the company aims to capture a larger share of the growing artificial intelligence market, putting it in competition with Microsoft. Amazon's CEO, Andy Jassy, announced the cloud business was stabilizing, and large expansions with existing customers and new agreements were expected to drive growth in the final quarter. Amazon's shares have rallied about 40% this year, despite a recent 8% drop following Alphabet's warning of reduced cloud spending by customers. In the July-September period, Amazon posted its first quarter-on-quarter increase in cloud growth in nearly two years, with 12.3% growth in AWS. Although AWS growth was slower than Microsoft's Azure cloud business, it still remains larger overall. Amazon is looking to catch up in the AI race with investments and services, including a $4 billion investment in chatbot-maker Anthropic and its Bedrock AI service.