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 results on Thursday, forum.batman.gainedge.org 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 previous 2 years on the belief that huge datacenter needs for artificial-intelligence innovations would power investment for many years.

But that was before Chinese startup DeepSeek said it had actually attained AI developments at a portion of the expense, precipitating a selloff in innovation stocks that some state was past due.

Still, Amazon might be better positioned than competitors to profit from cheaper AI, experts state, due to its enormous cloud service and lower direct exposure to costly large-language models that power apps like ChatGPT.

Amazon Web Services, the world's largest cloud companies, is expected to post its strongest earnings increase in eight quarters at 19.3%, according to information put together by LSEG.

But Microsoft and Meta were both required to safeguard their AI costs plans last week, and shares of Google-parent Alphabet slumped 8% on Wednesday after it said it would be spending more on capex than analysts prepared for.

"Microsoft and Google outcomes have actually put much more of a microscopic lense on Amazon's cloud growth," said Dave Wagner, portfolio manager at Aptus Capital Advisors, which holds shares in all 3 innovation companies.

"But if Amazon can squash it on their cloud numbers, the marketplace's going to definitely love that report."

The company was the first huge cloud service provider to accept 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 development at Microsoft Azure and Google Cloud, the 2nd- and third-biggest cloud players, has stimulated some caution from experts about AWS' efficiency.

"Microsoft said it was capacity constrained, Google said it was capability constrained. More than likely, Amazon is going to state it might have been capacity constrained as well which's why its growth rate isn't rather as much as what the marketplace may have expected," said Bob O'Donnell, chief expert at TECHnalysis Research.

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

"We actually believe that AWS is regaining share. It had been growing a lot slower than Microsoft Azure and Google Cloud for a time period, however we think 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 analyst Gil Luria said.

The company has maintained a greater appraisal than some of its competitors, with a current forward price-to-earnings ratio of almost 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 wiki.vst.hs-furtwangen.de a multitude of clothing business issued rosy forecasts over the past month.

Amazon's North American sales for the fourth quarter are projected to rise 9% year-on-year. After a downturn in online sales development previously this year, analysts say Amazon is primed for a rebound in the retail company, which has actually influenced its post-earnings share motions over the past two quarters.

Data from Adobe Analytics showed U.S. consumers spent lavishly online in between November and systemcheck-wiki.de December 2024, spending more than $240 billion, drawn by deep discount rates on whatever from TVs to toys.

The holiday costs growth rate of 8.7% nearly doubled from the 4.9% tape-recorded in 2023, the information showed.

Amazon has actually likewise attempted to enhance shipment times and broadened item merchandise, including its focus on grocery, drug store and fashion - relocations analysts state will help propel development.

"Most indicators are that it was a good quarter. There was an excellent vacation season for the customer therefore there's a lot of factor to believe Amazon will have done well because side of the service," Luria said.

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