AI 'turning moment' is approaching for Amazon

Citing a recent customer survey conducted by a prominent channel partner, Mizuho analysts believe that Amazon is poised for an AI inflection moment.

According to a poll conducted by an investment firm, Amazon Web Services (AWS), the company's cloud computing division, is expected to develop at an accelerated rate.

"We see an accelerated sales cycle from increased demand of ECB meetings and incremental exits of data centre contracts," according to the paper. According to reports, businesses are looking to close deals and pay upfront to get out of data centres, which will shorten AWS's sales cycle.

Although infrastructure investment continues to dominate the spending mix by category, Mizuho points out an important change: "cost optimisation being offset by new services such as app monitoring, chatbot deployments, and large migration programmes." This suggests that AWS is moving towards higher-value offerings.

According to Mizuho, the advancements made in Generative AI (Gen-AI) programmes are the most intriguing discovery.

"The survey shows external-facing models (20% of total) are only 6 months away from commercial deployment," according to the paper. This implies that when these models are made available to a sizable external client base, there may be a spike in inferencing activity.

Mizuho has raised its conviction on AWS revenue growth in light of these results, projecting 20% YoY growth as opposed to the consensus of 17.5%. AMZN is still regarded as their Top Pick.

(Sources: investing.com, reuters.com)