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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 outcomes on Thursday, after Microsoft and Google's uninspired reports jolted investor faith in Big Tech's billion-dollar financial investments in AI.

Shares of significant tech companies rose in the past two years on the belief that massive datacenter requires for artificial-intelligence innovations would power financial investment for many years.

But that was before Chinese start-up DeepSeek said it had attained AI breakthroughs at a portion of the cost, precipitating a selloff in technology stocks that some say was overdue.

Still, Amazon may be better located than competitors to capitalize on cheaper AI, analysts state, due to its enormous cloud business and lower direct exposure to costly large-language designs that power apps like ChatGPT.

Amazon Web Services, the world's largest cloud providers, is anticipated to post its strongest earnings increase in eight quarters at 19.3%, according to information compiled by LSEG.

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

"Microsoft and Google outcomes have put even more of a microscope on Amazon's cloud growth," said Dave Wagner, portfolio manager at Aptus Capital Advisors, setiathome.berkeley.edu which holds shares in all 3 technology companies.

"But if Amazon can squash it on their cloud numbers, the marketplace's going to absolutely enjoy that report."

The company was the first huge cloud company to embrace DeepSeek's AI models last month and has said its capital costs, mainly on AI, would be more than the $75 billion it approximated for 2024.

Slowing growth at Microsoft Azure and Google Cloud, the second- and third-biggest cloud players, asteroidsathome.net has actually stimulated some caution from experts about AWS' performance.

"Microsoft said it was capability constrained, Google said it was capability constrained. More than likely, Amazon is going to say it might have been capability constrained too which's why its growth rate isn't quite approximately what the marketplace might have anticipated," said Bob O'Donnell, primary analyst at TECHnalysis Research.

Some analysts see the weak point at rivals as an indication that Amazon might have captured up in the AI race through efforts including doubling its financial investment in Anthropic and providing a wide choice of AI designs on its cloud platform.

"We really believe that AWS is regaining share. It had actually been growing a lot slower than Microsoft Azure and Google Cloud for a duration of time, however our company believe that as Amazon has captured up on its AI offering, it might have less of a deceleration than Azure and Google Cloud," D.A. Davidson analyst Gil Luria said.

The business has actually maintained a higher appraisal than a few of its rivals, with an existing forward price-to-earnings ratio of almost 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 likely to gain from a healthy holiday shopping season, after competing retailers such as Target and bbarlock.com a slew of issued rosy projections over the previous month.

Amazon's North American sales for the fourth quarter are forecasted to rise 9% year-on-year. After a slowdown in online sales development previously this year, analysts state Amazon is primed for a rebound in the retail company, which has affected its post-earnings share motions over the past two quarters.

Data from Adobe Analytics showed U.S. consumers spent lavishly online in between November and December 2024, spending more than $240 billion, bio.rogstecnologia.com.br drawn by deep discounts on whatever from TVs to toys.

The holiday spending development rate of 8.7% practically doubled from the 4.9% tape-recorded in 2023, the data revealed.

Amazon has actually also tried to enhance shipment times and broadened item merchandise, including its concentrate on grocery, gratisafhalen.be drug store and style - moves analysts state will assist propel growth.

"Most indications are that it was an excellent quarter. There was an excellent holiday for the customer therefore there's a lot of factor to think Amazon will have succeeded in that side of the service," Luria said.

(Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai)