In the AI boom, is Amazon AWS falling behind Microsoft Azure?

Although Amazon recently announced a slowdown in its cloud computing business, Loop Capital analyst Rob Sanderson believes that Amazon will not fall behind in this AI competition. In a research report, Sanderson pointed out that this is only temporary and he believes that the slowdown in Amazon's business will bottom out and then reverse.

On April 27th, Amazon's first-quarter performance exceeded Wall Street's expectations, but warned that customer cloud spending has slowed down.

Sanderson rated Amazon's stock as "buy" with a target price of $140, and he believes that one reason Amazon will start to grow from now on is the future of artificial intelligence.

Sanderson wrote: "As excitement about generative AI has been focused on Microsoft and Alphabet-C, many investors have questioned whether Amazon is at a disadvantage." "We believe that more and more investors will soon realize that artificial intelligence will drive substantial expansion of cloud demand, and Amazon will become a major participant."

However, not all analysts are optimistic about Amazon's cloud business growth. Itaú BBA analyst Thiago Alves Kapulskis said that the competition between Amazon and Microsoft's cloud computing services is worrying.

"This analyst wrote: "Due to so much uncertainty facing Amazon, and after a huge divergence between Azure and Amazon, we believe the market will favor the former and Microsoft rather than the latter." He rated Amazon as "outperforming the market" with a target stock price of $124.