Amazon shares point to ‘robust growth’ on AWS, AI-fueled cloud
Amazon shares look set for a higher open after the company’s Q4 sales expectations beat the street. The retail giant says robust growth was helped by new generative AI features in its cloud and ecommerce unit.
However, as IGTV’s Angeline Ong investigates, the company’s position as the world’s biggest cloud provider is being challenged by Microsoft.
(AI Video Summary)
Amazon shares set to rise following strong Q4 earnings
Amazon reported better-than-expected financial results for the last quarter, which caused its stock to rise. Not only did the company's revenue exceed expectations, but its earnings per share were also higher than anticipated. The main reason for this positive outcome is Amazon's sales forecast for the next quarter, which indicates increased business opportunities. Looking at the stock chart, we can see that Amazon's shares have been on the rise over the past year, with a staggering 81% increase in 2023 alone.
Amazon's AI developments
Amazon attributes this growth to their new and innovative generative AI features in their cloud and e-commerce businesses, especially during the holiday season. It's important to note that investing in AI can be a costly venture, as was highlighted by Microsoft's recent stock decline due to concerns about the expenses of their AI investments.
To maintain its competitive advantage over Microsoft, its biggest competitor, Amazon's success in driving its business through its AWS (Amazon Web Services) and the continuous growth in the cloud space will be crucial. If Amazon can prove that its AI investments are paying off, there is potential for the company's stock to further increase. However, there is also a risk that high costs and investor fatigue about long-awaited returns could become issues, leading to a decline in the stock's value.
Overall, the future performance of AWS and the effectiveness of Amazon's AI strategy will play a vital role in determining the company's stock performance. By strategically leveraging its cloud services and demonstrating the benefits of its AI investments, Amazon has the opportunity to continue its upward trajectory in the stock market.
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