On Friday (February 7, 2025), Amazon’s shares hit 4%, and after its latest cloud computing data smoked, nearly $ 100 billion in market value.
Investors who carefully monitored the heavy expenses of the company on AI were left under the numbers – which was particularly advocated by similar disappointment from Microsoft and the parent company Google, Alphabet.
This last kick comes at a time when we lead American cloud giants under increasing pressure to prove that massive AI investment will be reflected in rapid income growth. The situation was further intensified last month when Chinese deep search introduced a low -cost AI and raised questions about the competitive landscape.
Despite the decline, Amazon shares remain 4%in 2025, while Microsoft and Alphabet both slipped by 3%.
Amazon Cloud returned growth by deficiency
Amazon Web Services (AWS), a cloud arm of the company, reported income of $ 28.79 billion over the last quarterly 19% year -on -year, but according to LSEG data, only analysts of $ 28.87 billion were expected. This growth rate was identical to the previous quarter, which did not provide acceleration that some investors had hoped for.
Amazon’s view of the current quarter, which contributes to concern, also disappointed, with the returned and profitable forest failed to excite Wall Street.
Alphabet and Microsoft, which both reported a solid increase in their cloud income, also missed the expectations of investors and signaled a wider slowdown in this industry.
Cloud slowing or capacity?
The fact that all three cloud providers – Amazon, Microsoft and Google – missed expectations, increased Eybrows among the analysts. Daniel Morgan, Head of Portfolio Synus Trust manager, not that this trend raises greater questions about the trajectory of industry.
“The fact that all three missed is a bigger story.” There’s something okay … It’s like okay, what’s going on? Why miss you (expectations) if the Capex guide rises? “Morgan said.
“We scratch our heads,” is it a limitation of capacity or is it something we don’t know about? “
Tech Giants continues its AI Arms race
Despite unsatisfactory numbers, Big Tech does not slow down for investment. Companies such as Nvidia, Meta, Microsoft, Tesla and Alphabet Hogshold together poured suspended billions of dollars into the development and scaling of infrastructure controlled by A.
Even with some short -term uncertainty, analysts on Amazon remain tremendously BullLish. Of the 68 analysts covering shares, none of them recommend sales, while four hold a neutral evaluation and the rest evaluates the purchase, according to LSEG data.
At least 10 analysts have increased their price goals for Amazon after their earnings report, while four cut off their own, thus increasing the median goal to $ 260 – indicating a potential 13% up from Friday’s final price.
As Amazon compares with its peers
The Amazon award also remains the topic of discussion. The 12 -month -old price ratio for earnings (P/E) is 37, which is higher than Alphabet’s (23) and Microsoft (29), reflecting investors’ confidence in its long -term potential despite the nearby winds.
(Pixabay picture)
See also: AWS strengthens ties with the Australian government in a new cloud agreement
Do you want to know more about cyber security and cloud from industry leaders? Check out Cyber Security & Cloud Expo in Amsterdam, California and London.
Explore other upcoming events and webinars with technology and webinars driven Techforge here.