Why Amazon Stock Was Moving Higher Today

Jeremy Bowman, The Motley Fool
2 min read
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Shares of Amazon (NASDAQ: AMZN) were among the winners as strong cloud infrastructure results from Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) seemed to lead investors to believe that Amazon will report similar strength in its cloud unit when it reports first-quarter earnings next Tuesday.

Both of its Magnificent Seven peers also reported strong overall results, sending tech stocks up broadly today, and stoking enthusiasm for Amazon's update next week.

As a result, Amazon stock was up 3.4% at the close on Friday.

A digital image of a cloud inside the world.
Image source: Getty Images.

A good quarter for AI and the cloud

While Amazon's cloud infrastructure business, Amazon Web Services (AWS), competes with Google Cloud and Microsoft Azure, investors seem to believe that a rising tide in cloud infrastructure spending will benefit AWS.

Microsoft reported impressive 31% revenue growth in Azure in its most recent quarter, and management noted that more than 65% of the Fortune 500 is now using its Azure OpenAI service as artificial intelligence (AI) helps drive cloud spending.

At Alphabet, meanwhile, Google revenue jumped 28% and profitability ramped up as well, which management said reflected strong demand for cloud infrastructure and its Workspace productivity tools.

Does it matter for Amazon?

Investors should be wary of reading too closely into those two companies' earnings reports. AWS has been struggling for the past few quarters with revenue growth in the low teens, losing market share to both Azure and Google Cloud. But AWS did show some signs of a rebound in the fourth quarter, which could bode well for Tuesday's update.

And both Microsoft and Alphabet are seeing strong demand for AI, which should support Amazon's AI initiatives as well.

We'll get the full picture on Amazon when it reports earnings on April 30. Analysts are expecting revenue to grow 25.1% to $142.5 billion, and for earnings per share to jump $0.31 to $0.83. Those expectations could set the stock up for a big swing on Wednesday, depending on the results.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Why Amazon Stock Was Moving Higher Today was originally published by The Motley Fool

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