By Deborah Mary Sophia

Feb 5 (Reuters) - The pressure is on Amazon.com to deliver on lofty expectations for cloud computing in its fourth-quarter results on Thursday, after Microsoft and Google’s uninspired reports jolted financier faith in Big Tech’s billion-dollar investments in AI.

Shares of major tech business surged in the past two years on the belief that enormous datacenter needs for artificial-intelligence innovations would power investment for several years.

But that was before Chinese startup DeepSeek said it had actually attained AI developments at a portion of the expense, speeding up a selloff in innovation stocks that some state was overdue.

Still, Amazon may be better positioned than rivals to take advantage of more affordable AI, analysts say, due to its huge cloud company and lower exposure to costly large-language models that power apps like ChatGPT.

Amazon Web Services, the world’s biggest cloud services provider, is anticipated to publish its greatest profits increase in eight quarters at 19.3%, according to information compiled by LSEG.

But Microsoft and Meta were both forced to safeguard their AI budget recently, and shares of Google-parent Alphabet dropped 8% on Wednesday after it said it would be investing more on capex than experts anticipated.

“Microsoft and Google results have put even more of a microscope on Amazon’s cloud growth,” said Dave Wagner, portfolio manager at Aptus Capital Advisors, humanlove.stream which holds shares in all three technology business.

“But if Amazon can squash it on their cloud numbers, the marketplace’s going to definitely enjoy that report.”

The business was the very first big cloud company to accept DeepSeek’s AI models last month and has said its capital costs, forum.altaycoins.com mainly on AI, would be more than the $75 billion it estimated for 2024.

Slowing growth at Microsoft Azure and Google Cloud, the second- and third-biggest cloud players, has triggered some care from experts about AWS’ performance.

“Microsoft said it was capacity constrained, Google said it was capacity constrained. More than likely, Amazon is going to state it might have been capability constrained too which’s why its development rate isn’t quite as much as what the marketplace may have expected,” said Bob O’Donnell, primary expert at TECHnalysis Research.

Some analysts see the weak point at competitors as a sign that Amazon may have captured up in the AI race through efforts consisting of doubling its financial investment in Anthropic and using a broad selection of AI designs on its cloud platform.

“We in fact think that AWS is regaining share. It had been growing a lot slower than Microsoft Azure and Google Cloud for a time period, but our company believe that as Amazon has captured up on its AI offering, it may have less of a deceleration than Azure and Google Cloud,” D.A. Davidson expert Gil Luria said.

The business has maintained a higher appraisal than a few of its rivals, with a present forward price-to-earnings ratio of nearly 39. Microsoft’s forward P/E is 29 and Alphabet’s 22.4, according to LSEG information.

RETAIL STRENGTH

The e-commerce giant’s results are likewise most likely to gain from a healthy vacation shopping season, after rival retailers such as Target and a variety of clothing companies issued rosy projections over the past month.

Amazon’s North American sales for the 4th quarter are projected to increase 9% . After a downturn in online sales growth earlier this year, experts say Amazon is primed for a rebound in the retail service, which has affected its post-earnings share movements over the past 2 quarters.

Data from Adobe Analytics revealed U.S. shoppers splurged online in between November and December 2024, investing more than $240 billion, drawn by deep discounts on whatever from TVs to toys.

The vacation spending development rate of 8.7% nearly doubled from the 4.9% taped in 2023, the data revealed.

Amazon has also tried to improve shipment times and broadened product merchandise, including its concentrate on grocery, pharmacy and style - moves analysts say will assist move development.

“Most signs are that it was a great quarter. There was a great holiday for the customer therefore there’s lots of factor to believe Amazon will have succeeded because side of the company,” Luria said.

(Reporting by Deborah Sophia in Bengaluru