Amazon in Focus: Quarterly Figures Marked by AI and Cloud Expansion

Amazon is on the verge of releasing its quarterly figures, continuing the series of Big Tech results that were initiated by Alphabet's impressive performance. Before the world turns its attention to the upcoming U.S. presidential elections, analysts eagerly anticipate Amazon's report and the latest developments in the areas of cloud and artificial intelligence. Investors are focusing on Amazon's cloud business, which is responsible for a significant part of the company's growth. As Amazon continues to strengthen its market-leading position, new AI tools are being integrated to unlock additional revenue streams. This puts Amazon in direct competition with cloud giants like Microsoft and Alphabet, who are also investing heavily in their data infrastructure to meet the growing demand for AI technology. Amazon's management reports that the AI sector has already generated billions for the cloud segment and plans to further expand investments in AWS services and generative AI. Amazon's rapidly growing advertising market is also in the spotlight. Despite solid growth in the last quarter, advertising revenues disappointed analysts and drew criticism in the stock market. In particular, the introduction of ads on Prime Video may progress slower than expected, posing risks as noted by Bank of America analysts. Nonetheless, Amazon is still in the early stages of developing video advertisements. Arun Sundaram, Senior Equity Analyst at CFRA Research, maintains a long-term positive outlook on Amazon, describing the company as a lucrative and consistently profit- and cash-flow-optimized story over several years. However, he acknowledges that legal and regulatory challenges, growing competition in e-commerce, and increased investments in Prime Video content and generative AI present potential risks.