Amazon's AI Cloud Strategy To Stay Strong Amid 'Near-Term Turbulence', Says Analyst: 'AWS Remains Well-Positioned For Long-Term AI Trends' - Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN)

Amazon Inc. AMZN has been lauded by Monness Crespi Hardt analyst for its positioning in the AI cloud sector, despite the weakness in other technology companies.

What Happened: The GTC AI conference hosted by Nvidia NVDA, dubbed the “Super Bowl of AI,” which took place last week, did not significantly boost U.S. tech stocks. Brian White, the analyst at Monness Crespi Hardt, believes this is due to the market’s focus on an unstable macro environment and a decline in enthusiasm for the gen AI trade after more than two years of hype with few beneficiaries, reported Investor’s Business Daily.

Despite this, White shared in his investor note that Amazon’s cloud business, Amazon Web Services (AWS), has already seen benefits from gen AI through training Large Language Models (LLMs). He expects these growth drivers to increase over time.

White also highlighted a possible larger market opportunity in the future for executing AI models, a process known as inferencing. This point was also made by Nvidia CEO Jensen Huang at the conference. Despite current market instability, White maintains a buy call for Amazon stock with a target price of $265, stating that AWS is well-positioned for long-term AI trends.

Despite “near-term turbulence, AWS remains well-positioned for long-term AI trends,” stated Whites in the investor note.

Why It Matters: Amazon’s positive review from White comes on the heels of another analyst’s endorsement. Evercore ISI’s Mark Mahaney expressed optimism about Amazon’s potential, naming it his top stock to own. Also, Wedbush analyst Dan Ives stated, “We are seeing many IT departments focused on foundational hyperscale deployments for AI around Microsoft MSFT, Amazon, and Google GOOG GOOGL with a laser focus on the software-driven use cases currently underway.”

These endorsements underscore the potential of Amazon’s AI cloud positioning and its ability to capitalize on AI trends. The company’s ability to train LLMs and the future market opportunity for running AI models, as highlighted by White, further solidify Amazon’s standing in the AI space.

On Tuesday, Alibaba’s Chairman, Joe Tsai alarmed about a possible AI data center bubble in the U.S., however, market experts like Jim Cramer and Gene Munster dismissed the concerns.

Amazon holds a momentum rating of 75.34% and a growth rating of 94.54%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.

Amazon stock rose 1.2% to close at $205.71 on Tuesday. The stock has gained over 15% during the past year.