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 lackluster reports jolted investor faith in Big Tech’s billion-dollar financial investments in AI.

Shares of significant tech companies rose in the past 2 years on the belief that enormous datacenter needs for artificial-intelligence innovations would power for years.

But that was before Chinese start-up DeepSeek said it had actually attained AI advancements at a portion of the cost, speeding up a selloff in technology stocks that some say was past due.

Still, Amazon may be better located than rivals to profit from less expensive AI, analysts say, due to its enormous cloud company and lower direct exposure to expensive large-language models that power apps like ChatGPT.

Amazon Web Services, the world’s biggest cloud providers, qoocle.com is anticipated to publish its greatest income boost in 8 quarters at 19.3%, according to data compiled by LSEG.

But Microsoft and Meta were both required to safeguard their AI spending strategies last week, and shares of Google-parent Alphabet plunged 8% on Wednesday after it said it would be investing more on capex than analysts anticipated.

"Microsoft and Google outcomes have put a lot more of a microscopic lense on Amazon’s cloud development,” said Dave Wagner, portfolio supervisor at Aptus Capital Advisors, which holds shares in all 3 technology business.

"But if Amazon can crush it on their cloud numbers, the market’s going to definitely like that report.“

The company was the very first huge cloud service provider 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 estimated for 2024.

Slowing growth at Microsoft Azure and Google Cloud, the 2nd- and third-biggest cloud players, has actually stimulated some caution from experts about AWS’ efficiency.

"Microsoft said it was capacity constrained, Google said it was capacity constrained. More than likely, Amazon is going to say it may have been capability constrained as well and that’s why its development rate isn’t rather approximately what the market may have expected,” said Bob O’Donnell, primary expert at TECHnalysis Research.

Some experts see the weak point at competitors as an indication that Amazon may have caught up in the AI race through efforts including doubling its financial investment in Anthropic and providing a broad selection of AI designs on its cloud platform.

"We actually think that AWS is regaining share. It had actually been growing a lot slower than Microsoft Azure and Google Cloud for an amount of time, however we believe that as Amazon has actually 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 actually 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 outcomes are likewise likely to gain from a healthy holiday shopping season, after rival retailers such as Target and a slew of clothing business provided rosy projections over the past month.

Amazon’s North American sales for the fourth quarter are predicted to rise 9% year-on-year. After a slowdown in online sales development previously this year, experts say Amazon is primed for a rebound in the retail company, which has actually affected its post-earnings share movements over the previous 2 quarters.

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

The vacation costs growth rate of 8.7% almost doubled from the 4.9% tape-recorded in 2023, the data revealed.

Amazon has actually also attempted to improve shipment times and expanded product merchandise, including its concentrate on grocery, drug store and fashion - moves experts say will assist propel growth.

"Most indications are that it was an excellent quarter. There was an excellent vacation season for the consumer and so there’s plenty of factor to think Amazon will have done well because side of business,” Luria said.

(Reporting by Deborah Sophia in Bengaluru