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By Deborah Mary Sophia

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

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

But that was before Chinese startup DeepSeek said it had attained AI breakthroughs at a portion of the cost, speeding up a selloff in technology stocks that some state was overdue.

Still, Amazon might be much better positioned than rivals to profit from less expensive AI, hb9lc.org analysts state, due to its huge cloud business and lower direct exposure to expensive large-language models that power apps like ChatGPT.

Amazon Web Services, the world's largest cloud providers, is anticipated to post its greatest income increase in 8 quarters at 19.3%, asteroidsathome.net according to information put together by LSEG.

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

"Microsoft and Google outcomes have actually put much more of a microscope on Amazon's cloud growth," said Dave Wagner, portfolio manager at Aptus Capital Advisors, oke.zone which holds shares in all three technology business.

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

The company was the very first huge cloud provider to accept DeepSeek's AI designs last month and smfsimple.com has said its capital costs, timeoftheworld.date mainly on AI, smfsimple.com 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 gamers, has actually sparked some care from analysts about AWS' performance.

"Microsoft said it was capacity constrained, Google said it was capacity constrained. More than likely, Amazon is going to say it might have been capacity constrained as well which's why its development rate isn't quite up to 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 may have captured 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 really believe that AWS is regaining share. It had been growing a lot slower than Microsoft Azure and Google Cloud for a time period, however our company believe that as Amazon has actually captured up on its AI offering, it might have less of a deceleration than Azure and Google Cloud," D.A. Davidson expert Gil Luria said.

The company has actually maintained a higher appraisal than a few of its rivals, bytes-the-dust.com with an existing forward price-to-earnings ratio of nearly 39. Microsoft's forward P/E is 29 and Alphabet's 22.4, according to LSEG data.

RETAIL STRENGTH

The e-commerce giant's results are also most likely to gain from a healthy vacation shopping season, after rival retailers such as Target and a variety of garments business issued 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 growth previously this year, experts say Amazon is primed for a rebound in the retail organization, which has actually affected its post-earnings share movements over the past two quarters.

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

The holiday spending development rate of 8.7% nearly doubled from the 4.9% recorded in 2023, the information showed.

Amazon has also attempted to enhance delivery times and expanded item merchandise, including its focus on grocery, drug store and fashion - moves experts say will assist propel development.

"Most signs are that it was a great quarter. There was a great vacation season for the customer and so there's plenty of reason to think Amazon will have done well because side of the business," Luria said.

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

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