Matt Garman, CEO of Amazon.com, Inc (NASDAQ:AMZN) cloud unit, has described artificial intelligence (AI) as an ongoing and transformative technology. In an interview before the Amazon Web Services (AWS) re:Invent conference, Garman emphasized AI's endless potential, stating, "It's just a thing that's going to happen forever."
The annual event, which kicks off in Las Vegas, is expected to showcase significant AI and cloud computing updates.
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The upcoming conference marks Garman's first keynote since assuming his role in June. He plans to unveil "real, needle-moving changes" in AI, computing, and other vital areas, The Wall Street Journal reports. These advancements are critical as AWS faces mounting pressure from competitors like Microsoft Corp (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL).
According to Gartner, Amazon has seen its global cloud market share dip slightly, falling to 39% in 2023 from 39.9% in 2022. Meanwhile, rivals Microsoft and Google have gained traction, with respective market shares increasing to 23% and 8.2% during the same period. Garman acknowledged this competitive environment but stressed AWS's role as a platform offering diverse AI models, likening its approach to "a bit of everything for everyone."
Amazon recently doubled its investment in the AI startup Anthropic to $8 billion, signaling its commitment to staying at the forefront of AI development. The collaboration will leverage AWS's Trainium chips, which Garman claims are cost-effective solutions for training AI models.
Bank of America Securities analyst Justin Post deems the expanded partnership mutually beneficial for the companies. Amazon gains a strong AI partner to help maintain the AI moat, and Anthropic gains more capital. Post also expects the co-development of Amazon's Trainium chip capabilities could accelerate progress and build credibility for the chips.
Bernstein analyst Mark Shmulik considers Amazon a substantial investment opportunity. Despite planned increases in infrastructure spending next year, Shmulik emphasizes Amazon's ability to generate returns on such investments, particularly in areas like Prime Video.
Shmulik told Yahoo Finance, "Amazon feels like the name that you can put money to work in and get excited about," highlighting AWS revenue showing momentum heading into the fourth quarter, Prime Video investments, and more.
In July, JMP Securities' Nicholas Jones flagged AWS gaining ground as Microsoft Azure grappled with softness in some European geographies and capacity constraints.
Investors can gain exposure to Amazon through ProShares Online Retail ETF (NYSE:ONLN) and SPDR Select Sector Fund – Consumer Discretionary (NYSE:XLY).
Price Action: AMZN stock is up 2% at $212.08 at last check Monday.
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