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Amazon Is 'Catching Up' To Microsoft In This Key AI Metric

2025-08-27 20:26:00 英文原文

作者:Investor's Business Daily

Amazon (AMZN) stock took a big hit earlier this month. It came after its Q2 results reignited fears that the tech titan is falling behind cloud rivals Microsoft (MSFT) and Google-parent Alphabet (GOOGL) in the race to win AI business.

But Amazon is "catching up" in at least one regard, analysts with Morgan Stanley said Wednesday.

Amazon will increase it 2025 capital expenditures dedicated to its Amazon Web Services by a similar total — roughly $33 billion in added spending — as Microsoft's Azure and Alphabet's Google Cloud. That's according to new forecasts from Morgan Stanley's Brian Nowak. That is a positive signal for the e-commerce giant. Amazon "under-grew" its investments in cloud capacity in comparison to Microsoft in 2023 and 2024, Nowak wrote in a client note.

In cloud computing, capex investments can indicate demand. So-called hyperscalers like AWS and Microsoft Azure invest in building data centers with computing power they can then rent to other enterprises. Nowak noted that Microsoft is still spending nearly double that of AWS on capex when considered as a percentage of total revenue.

"While we see this step up in AWS capex as a bullish indicator of demand to come, we are cognizant of the fact that despite this inflection, overall capex intensity at AWS continues to lag Azure," Nowak wrote. "This may be due to several factors and is one reason why we expect AWS capex to continue to grow and for capex revisions to likely be skewed to the upside as well, to match forward demand."

Nowak estimates that Amazon could add 8.5 million square feet of data center capacity this year and 10 million square feet in 2026. That's roughly even with the pace of 2024 and a step up from previous years, according to the analyst's note.

Amazon Stock: Waiting On Cloud Acceleration

Adding that much cloud level of capacity could help accelerate AWS revenue growth to roughly 20% in 2026, Nowak said. That type of growth could help alleviate a key investor concern.

AWS revenue increased 17.5% to $30.8 billion in the second quarter. Meanwhile, Microsoft and Google both grew cloud revenue more than 30%. Of course, Azure and Google Cloud are growing from a smaller overall base of sales. But Amazon's two cloud rivals both managed to accelerate their cloud growth rates from the previous quarter, citing a boost for AI demand. Amazon's cloud growth was only a minor increase from 17% in Q1.

Amazon stock slumped more than 8% the day after its July 31 report. Shares have recovered slightly since then but remain below recent highs from late in July.

Amazon stock rose a fraction to close at 229.12 on the stock market today. Shares overtook Amazon's 21-day moving average with gains on Friday.

Buy Rating With 300 Price Target

Nowak rates Amazon stock a buy with a price target of 300. But he said the improving growth rate for AWS will be crucial for Amazon shares to rally further.

"AWS's forward growth and competitive positioning in this early Gen AI era remains the key investor debate and driver of Amazon's (share price to earnings) multiple," Nowak wrote. "We believe AWS's demand backlog remains strong. But in order for these workloads and revenue to flow, AWS still has to work through capacity constraints, which our new analysis suggests AWS is working through ... which we view is a positive signal of faster AWS revenue growth ahead."

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摘要

Amazon is set to increase its 2025 capital expenditures for Amazon Web Services (AWS) by approximately $33 billion, aligning closely with Microsoft Azure and Google Cloud’s investments. This move, according to Morgan Stanley analyst Brian Nowak, signals a positive shift as AWS aims to match demand in the cloud market, though it still lags behind Azure's spending intensity relative to total revenue. Nowak forecasts AWS could add significant data center capacity, potentially accelerating revenue growth to around 20% by 2026, addressing investor concerns over AWS’s lagging cloud business growth compared to Microsoft and Google.

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