Analyst Backs Amazon, Alphabet After 82% Google Cloud Surge, Flags Microsoft
Updated
Updated · The Motley Fool · Aug 11
Analyst Backs Amazon, Alphabet After 82% Google Cloud Surge, Flags Microsoft
3 articles · Updated · The Motley Fool · Aug 11
Summary
Amazon and Alphabet emerged as the analyst’s preferred cloud plays after quarterly results, while Microsoft was singled out as the laggard despite a strong stock reaction.
82% Google Cloud growth led the group, ahead of Azure’s 43% and AWS’s 37%, with Alphabet’s gains tied to AI-driven demand and cheaper custom-chip computing.
AWS still won praise because its growth accelerated from 28% in the prior quarter, suggesting momentum at the largest cloud provider even though its headline rate trailed Microsoft’s.
Azure’s 43% growth followed 40% in the previous quarter, and that modest pickup drove the analyst’s concern that Microsoft’s cloud business is not accelerating as quickly as AI spending would imply.
Cloud providers remain the broader long-term AI beneficiaries because they are spending heavily to build capacity now and aim to recoup it by renting computing power to model developers and enterprise users.
With Alphabet doubling its CapEx to $45 billion, could an unexpected plateau in AI demand turn this massive infrastructure buildout into a financial liability?
Google Cloud boasts a rare 36% margin amidst massive spending, but how long can this profitability last before hardware commoditization strikes?
As Google's cloud growth accelerates, will looming global power grid and cooling bottlenecks suddenly choke off this explosive AI expansion?