Amazon rallies on cloud optimism as it chases Microsoft for AI business
Amazon.com rose 7% on Friday on a pick up in growth at its most profitable cloud business as it aims for a larger share of the booming artificial intelligence market in a race with Microsoft.
The ecommerce giant was on track to add almost $90 billion to its market capitalization based on its last traded share price of $128. Smaller cloud rival Microsoft rose 1.5%, while Alphabet was down about 1.3%.
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He also touted the AI opportunity for Amazon Web Services (AWS), saying that he expected the technology to lead to «tens of billions of dollars in revenue over the next several years».
Wall Street cheered the positive commentary for the business that brings in almost all of Amazon's profit, but had slowed after the pandemic as customers cut costs.
«Tech investors can breathe a sigh of relief, Bernstein analysts said in a client note, adding that „AWS growth sounds ready to re-accelerate even without AI.“
About 26 brokerages raised their price targets on the stock, pushing their median view to $173, according to LSEG data.
Amazon shares have rallied about 40% this year, but they have lost nearly 8% in the past two days after Alphabet warned that cloud customers were curbing spending.
In the July-September period, Amazon posted its first
