Amazon Cloud Needs to Deliver After Microsoft, Alphabet Misses
- Spending plans will be in view after big tech boosts to capex
- Shares recently hit records, and the multiple has been falling
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Amazon.com Inc. shares have largely climbed on the back of two trends: strength in its cloud business and a focus on costs. Now both could be in question.
Disappointing results from major cloud-computing companies Alphabet Inc. and Microsoft Corp. suggest reasons to be cautious about Amazon Web Services, the biggest player in the space — and a central plank in Wall Street’s nearly unanimously positive view on the stock. At the same time, a trend of growing capital expenditures as firms invest heavily in artificial intelligence could, if Amazon follows suit, force a recalibration of how profitable it can be this year.