Cloud Computing Giants Show Bright Future
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: NASDAQ.COM
- Cloud Market Potential: Amazon, Microsoft, and Google Cloud continue to grow their cloud computing businesses, with the four major AI hyperscalers expected to spend around $650 billion on capital expenditures by 2026, indicating strong demand and investment potential in the industry.
- Capital Expenditure Trends: The investments in data centers by these three companies will drive future revenue growth, with Amazon and Microsoft's operating cash flow appearing historically cheap, while Alphabet's valuation remains within a reasonable range, reflecting market confidence in cloud computing.
- Comparison with SpaceX: SpaceX's market cap stands at $2.5 trillion with an adjusted EBITDA of $6.6 billion in 2025, resulting in a price-to-adjusted EBITDA ratio of 379, highlighting the relative value attractiveness of the cloud giants.
- Investment Recommendations: Although Amazon is not currently listed among the best stocks to buy, analysts believe that considering the growth potential of cloud computing, Amazon, Microsoft, and Google Cloud will outperform SpaceX over the next decade, making them worthy of investor attention.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 237.500
Low
175.00
Averages
280.01
High
325.00
Current: 237.500
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Amazon's Data Center Investments Show Massive Potential
- Investment Return Potential: Amazon's investments in data centers are expected to yield massive returns, with AWS contributing 59% of profits despite the stock rising only about 7% in 2026, indicating strong profitability.
- Cloud Computing Growth: AWS's revenue growth of 28% in Q1 marks its best performance in nearly four years, significantly outpacing the 19% and 12% growth in international and North American commerce, highlighting the rapid expansion of its cloud business.
- AI Investment: Amazon is spending $200 billion on artificial intelligence, with CEO Andy Jassy noting that as computing power increases, customer demand rises, suggesting a multi-year growth cycle ahead.
- Valuation Attractiveness: Amazon's operating cash flow valuation is at a historical low, trading at 17 times compared to 32 times for Apple and 26 times for Alphabet, making it an attractive buying opportunity right now.
See More
Cloud Computing Giants Outshine SpaceX IPO Prospects
- Cloud Market Growth: The big three cloud giants, Amazon, Microsoft, and Google Cloud, are projected to increase data center capital expenditures to $650 billion by 2026, reflecting strong demand driven by AI, which will enhance long-term revenue growth and market share.
- Investment Return Potential: Amazon and Microsoft's operating cash flow appears historically cheap, while Alphabet's valuation, though higher, remains reasonable, indicating strong investment value during capital expenditure cycles that attract investor interest.
- SpaceX Valuation Comparison: SpaceX's adjusted EBITDA for 2025 is $6.6 billion, with a current market cap of $2.5 trillion, resulting in a price-to-adjusted EBITDA ratio of 379, significantly higher than the cloud giants, indicating that its growth potential needs time to materialize.
- Long-term Investment Recommendation: Given the stable growth and reasonable valuations of the cloud giants, they are expected to outperform SpaceX significantly over the next decade, making them a more attractive investment choice for higher returns.
See More
ArcelorMittal Partners with AWS to Enhance Industrial Automation
- Partnership Announcement: ArcelorMittal has partnered with Amazon Web Services (AWS) to accelerate industrial automation globally, leveraging cloud, AI, and edge technologies to enhance safety and energy efficiency in manufacturing processes.
- Technology Integration: This partnership integrates AWS's cloud and AI capabilities into ArcelorMittal's production processes, utilizing industrial IoT, real-time sensor data, and machine learning to enable predictive maintenance and digital twins, thereby optimizing production efficiency.
- Education Initiative: AWS will also provide an educational program to support ArcelorMittal's global workforce in adopting digital and AI technologies, ensuring effective implementation and skill enhancement among employees.
- Low-Carbon Steel Supply Agreement: The companies signed a multi-year supply framework agreement under which ArcelorMittal will supply lower-carbon XCarb structural steel for Amazon's operational facilities and data centers, supporting Amazon's goal of achieving net-zero carbon emissions by 2040.
See More
Cloud Computing Giants Show Bright Future
- Cloud Market Potential: Amazon, Microsoft, and Google Cloud continue to grow their cloud computing businesses, with the four major AI hyperscalers expected to spend around $650 billion on capital expenditures by 2026, indicating strong demand and investment potential in the industry.
- Capital Expenditure Trends: The investments in data centers by these three companies will drive future revenue growth, with Amazon and Microsoft's operating cash flow appearing historically cheap, while Alphabet's valuation remains within a reasonable range, reflecting market confidence in cloud computing.
- Comparison with SpaceX: SpaceX's market cap stands at $2.5 trillion with an adjusted EBITDA of $6.6 billion in 2025, resulting in a price-to-adjusted EBITDA ratio of 379, highlighting the relative value attractiveness of the cloud giants.
- Investment Recommendations: Although Amazon is not currently listed among the best stocks to buy, analysts believe that considering the growth potential of cloud computing, Amazon, Microsoft, and Google Cloud will outperform SpaceX over the next decade, making them worthy of investor attention.
See More
Anthropic's Upcoming IPO Amid Tripled Revenue Growth
- Significant Revenue Growth: Anthropic's annualized revenue has tripled since the end of 2025, exceeding $30 billion in early 2026, indicating strong performance in the AI market and suggesting continued growth potential.
- Deep Partnership with Amazon: Since 2023, Anthropic has partnered with Amazon, utilizing over 1 million Trainium 2 chips, with plans to spend over $100 billion on AWS over the next decade, further solidifying its position in AI infrastructure.
- Surge in Google Cloud Demand: Anthropic plans to use up to 1 million of Google's TPUs, contributing to a 63% year-over-year revenue increase for Google Cloud in the last quarter, highlighting the strong demand and market potential for AI technology.
- Support from Broadcom and Nvidia: Broadcom expects its AI chip revenue to exceed $100 billion by fiscal 2027, while Nvidia's GPU demand remains robust with an 85% year-over-year growth, providing strong support for Anthropic's computing capacity expansion.
See More
Anthropic's Claude Sees Surge in Demand, Triples Revenue
- Significant Revenue Growth: Anthropic's Claude has seen its annualized revenue triple since the end of 2025, exceeding $30 billion in early 2026, reflecting strong demand and growth potential in the AI market.
- Deepening Strategic Partnerships: Anthropic's collaboration with Amazon intensifies, with plans to invest over $100 billion in AWS over the next decade, indicating the company's commitment to cloud infrastructure and long-term strategy in AI.
- Diversified Computing Strategy: By utilizing Alphabet's TPUs and Nvidia's GPUs, Anthropic can maintain Claude's operations during demand spikes, ensuring its competitive edge in the rapidly evolving AI landscape.
- Supply Chain Expansion: Broadcom will supply Anthropic with next-generation TPUs and AI networking equipment, with AI chip revenue expected to exceed $100 billion by 2027, further solidifying Anthropic's critical role in AI infrastructure development.
See More
Amazon's Data Center Investments Show Massive Potential
- Investment Return Potential: Amazon's investments in data centers are expected to yield massive returns, with AWS contributing 59% of profits despite the stock rising only about 7% in 2026, indicating strong profitability.
- Cloud Computing Growth: AWS's revenue growth of 28% in Q1 marks its best performance in nearly four years, significantly outpacing the 19% and 12% growth in international and North American commerce, highlighting the rapid expansion of its cloud business.
- AI Investment: Amazon is spending $200 billion on artificial intelligence, with CEO Andy Jassy noting that as computing power increases, customer demand rises, suggesting a multi-year growth cycle ahead.
- Valuation Attractiveness: Amazon's operating cash flow valuation is at a historical low, trading at 17 times compared to 32 times for Apple and 26 times for Alphabet, making it an attractive buying opportunity right now.
See More
Cloud Computing Giants Outshine SpaceX IPO Prospects
- Cloud Market Growth: The big three cloud giants, Amazon, Microsoft, and Google Cloud, are projected to increase data center capital expenditures to $650 billion by 2026, reflecting strong demand driven by AI, which will enhance long-term revenue growth and market share.
- Investment Return Potential: Amazon and Microsoft's operating cash flow appears historically cheap, while Alphabet's valuation, though higher, remains reasonable, indicating strong investment value during capital expenditure cycles that attract investor interest.
- SpaceX Valuation Comparison: SpaceX's adjusted EBITDA for 2025 is $6.6 billion, with a current market cap of $2.5 trillion, resulting in a price-to-adjusted EBITDA ratio of 379, significantly higher than the cloud giants, indicating that its growth potential needs time to materialize.
- Long-term Investment Recommendation: Given the stable growth and reasonable valuations of the cloud giants, they are expected to outperform SpaceX significantly over the next decade, making them a more attractive investment choice for higher returns.
See More
ArcelorMittal Partners with AWS to Enhance Industrial Automation
- Partnership Announcement: ArcelorMittal has partnered with Amazon Web Services (AWS) to accelerate industrial automation globally, leveraging cloud, AI, and edge technologies to enhance safety and energy efficiency in manufacturing processes.
- Technology Integration: This partnership integrates AWS's cloud and AI capabilities into ArcelorMittal's production processes, utilizing industrial IoT, real-time sensor data, and machine learning to enable predictive maintenance and digital twins, thereby optimizing production efficiency.
- Education Initiative: AWS will also provide an educational program to support ArcelorMittal's global workforce in adopting digital and AI technologies, ensuring effective implementation and skill enhancement among employees.
- Low-Carbon Steel Supply Agreement: The companies signed a multi-year supply framework agreement under which ArcelorMittal will supply lower-carbon XCarb structural steel for Amazon's operational facilities and data centers, supporting Amazon's goal of achieving net-zero carbon emissions by 2040.
See More
Cloud Computing Giants Show Bright Future
- Cloud Market Potential: Amazon, Microsoft, and Google Cloud continue to grow their cloud computing businesses, with the four major AI hyperscalers expected to spend around $650 billion on capital expenditures by 2026, indicating strong demand and investment potential in the industry.
- Capital Expenditure Trends: The investments in data centers by these three companies will drive future revenue growth, with Amazon and Microsoft's operating cash flow appearing historically cheap, while Alphabet's valuation remains within a reasonable range, reflecting market confidence in cloud computing.
- Comparison with SpaceX: SpaceX's market cap stands at $2.5 trillion with an adjusted EBITDA of $6.6 billion in 2025, resulting in a price-to-adjusted EBITDA ratio of 379, highlighting the relative value attractiveness of the cloud giants.
- Investment Recommendations: Although Amazon is not currently listed among the best stocks to buy, analysts believe that considering the growth potential of cloud computing, Amazon, Microsoft, and Google Cloud will outperform SpaceX over the next decade, making them worthy of investor attention.
See More
Anthropic's Upcoming IPO Amid Tripled Revenue Growth
- Significant Revenue Growth: Anthropic's annualized revenue has tripled since the end of 2025, exceeding $30 billion in early 2026, indicating strong performance in the AI market and suggesting continued growth potential.
- Deep Partnership with Amazon: Since 2023, Anthropic has partnered with Amazon, utilizing over 1 million Trainium 2 chips, with plans to spend over $100 billion on AWS over the next decade, further solidifying its position in AI infrastructure.
- Surge in Google Cloud Demand: Anthropic plans to use up to 1 million of Google's TPUs, contributing to a 63% year-over-year revenue increase for Google Cloud in the last quarter, highlighting the strong demand and market potential for AI technology.
- Support from Broadcom and Nvidia: Broadcom expects its AI chip revenue to exceed $100 billion by fiscal 2027, while Nvidia's GPU demand remains robust with an 85% year-over-year growth, providing strong support for Anthropic's computing capacity expansion.
See More
Anthropic's Claude Sees Surge in Demand, Triples Revenue
- Significant Revenue Growth: Anthropic's Claude has seen its annualized revenue triple since the end of 2025, exceeding $30 billion in early 2026, reflecting strong demand and growth potential in the AI market.
- Deepening Strategic Partnerships: Anthropic's collaboration with Amazon intensifies, with plans to invest over $100 billion in AWS over the next decade, indicating the company's commitment to cloud infrastructure and long-term strategy in AI.
- Diversified Computing Strategy: By utilizing Alphabet's TPUs and Nvidia's GPUs, Anthropic can maintain Claude's operations during demand spikes, ensuring its competitive edge in the rapidly evolving AI landscape.
- Supply Chain Expansion: Broadcom will supply Anthropic with next-generation TPUs and AI networking equipment, with AI chip revenue expected to exceed $100 billion by 2027, further solidifying Anthropic's critical role in AI infrastructure development.
See More
