Amazon is continuing to grow its revenue with the help of its cloud computing arm, Amazon Web Services (AWS). The company’s shares have increased by 20.4% this year, outpacing the S&P 500 index. One of the recent partnerships that highlight the importance of AWS is with a generative AI company called NinjaTech AI. This company has launched an AI agent named Ninja, which has been trained using AWS Trainium and Inferentia2 machine learning chips to make them more powerful and useful. By utilizing Amazon SageMaker, NinjaTech AI aims to make training AI agents faster, more flexible, and affordable.
The use of next-generation chips and AWS cloud solutions has enabled Ninja to save time and money while implementing generative AI into everyday workflows. This move by NinjaTech AI showcases the efficiency and reliability of AWS’s cloud products and services, and it has strengthened AWS’s customer base. AWS has also introduced innovative solutions like Trainium and Inferentia2 chips, as well as Amazon Bedrock innovations, to enhance generative AI capabilities. These efforts are expected to drive customer momentum and revenue growth for AWS in the near and long term.
In the first quarter of 2024, AWS sales increased by 17% year over year to $25.04 billion, accounting for 18% of Amazon’s total sales. Strengthening the AWS segment will contribute to Amazon’s overall financial performance. For the second quarter of 2024, the Zacks Consensus Estimate for Amazon’s sales is $148.54 billion, indicating a year-over-year growth of 10.5%. Earnings per share are also expected to increase by 61.9% year over year.
While Amazon is leveraging its cloud computing strength through AWS, it faces competition from other tech giants like Microsoft and Alphabet’s Google. Microsoft’s Azure cloud business is experiencing strong momentum, driven by the adoption of Azure AI and generative AI capabilities. Google Cloud, on the other hand, has been a key catalyst for Alphabet’s growth, benefiting from generative AI capabilities and the expansion of its cloud infrastructure.
Amazon currently holds a Zacks Rank #3 (Hold), while Salesforce, another tech stock, has a Zacks Rank #2 (Buy). Salesforce’s shares have gained 8.3% this year, with a long-term earnings growth rate of 17.45%. These rankings and growth prospects in the tech sector indicate the potential for further advancement in the cloud computing market for companies like Amazon and Salesforce.
Overall, Amazon’s continued focus on strengthening its AWS portfolio and expanding its cloud capabilities will play a significant role in driving its financial performance and competitive position in the market.
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https://www.zacks.com/stock/news/2278216/amazon-amzn-boosts-aws-clientele-with-ninjatech-ai-deal