By Deborah Mary Sophia

Feb 5 (Reuters) - The pressure is on Amazon.com to provide on lofty expectations for cloud computing in its fourth-quarter outcomes on Thursday, after Microsoft and Google's dull reports jolted investor faith in Big Tech's billion-dollar investments in AI.

Shares of major tech companies surged in the previous two years on the belief that massive datacenter requires for artificial-intelligence innovations would power financial investment for many years.

But that was before Chinese startup DeepSeek said it had attained AI advancements at a portion of the expense, speeding up a selloff in technology stocks that some say was past due.

Still, Amazon may be much better located than competitors to take advantage of less expensive AI, analysts state, due to its enormous cloud organization and lower exposure to costly large-language designs that power apps like ChatGPT.

Amazon Web Services, the world's largest cloud providers, is expected to post its strongest revenue increase in 8 quarters at 19.3%, according to information assembled by LSEG.

But Microsoft and Meta were both required to defend their AI spending strategies last week, and shares of Google-parent Alphabet plunged 8% on Wednesday after it said it would be investing more on capex than experts anticipated.

"Microsoft and Google outcomes have actually put much more of a microscope on Amazon's cloud growth," said Dave Wagner, portfolio supervisor at Aptus Capital Advisors, which holds shares in all three innovation companies.

"But if Amazon can squash it on their cloud numbers, the market's going to definitely love that report."

The business was the very first huge cloud provider to accept DeepSeek's AI designs last month and has said its capital costs, mainly on AI, would be more than the $75 billion it approximated for 2024.

Slowing development at Microsoft Azure and Google Cloud, the second- and third-biggest cloud players, has sparked some caution from analysts about AWS' efficiency.

"Microsoft said it was capability constrained, Google said it was capability constrained. More than likely, Amazon is going to state it may have been capability constrained too which's why its development rate isn't quite as much as what the marketplace may have expected," said Bob O'Donnell, chief analyst at TECHnalysis Research.

Some analysts see the weakness at competitors as a sign that Amazon may have caught up in the AI race through efforts including doubling its financial investment in Anthropic and using a large choice of AI designs on its cloud platform.

"We really think that AWS is regaining share. It had been growing a lot slower than Microsoft Azure and Google Cloud for an amount of time, but we believe that as Amazon has actually captured up on its AI offering, it might have less of a deceleration than Azure and Google Cloud," D.A. Davidson analyst Gil Luria said.

The business has maintained a higher appraisal than a few of its competitors, with an existing forward price-to-earnings ratio of nearly 39. Microsoft's forward P/E is 29 and Alphabet's 22.4, according to LSEG data.

RETAIL STRENGTH

The e-commerce giant's outcomes are also most likely to gain from a healthy vacation shopping season, bytes-the-dust.com after competing retailers such as Target and systemcheck-wiki.de a slew of apparel companies issued rosy forecasts over the past month.

Amazon's North American sales for the fourth quarter are forecasted to rise 9% year-on-year. After a slowdown in online sales development earlier this year, experts state Amazon is primed for a rebound in the retail company, which has actually affected its post-earnings share movements over the past two quarters.

Data from Adobe Analytics showed U.S. shoppers splurged online in between November and December 2024, spending more than $240 billion, smfsimple.com drawn by deep discounts on whatever from TVs to toys.

The vacation spending development rate of 8.7% nearly doubled from the 4.9% taped in 2023, the information showed.

Amazon has actually likewise attempted to enhance shipment times and expanded item merchandise, including its concentrate on grocery, pharmacy and fashion - relocations experts state will help move development.

"Most indications are that it was a good quarter. There was an excellent holiday for the customer therefore there's lots of factor to believe Amazon will have succeeded because side of the company," Luria said.

(Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai)