Amazon Shares Rise as SemiAnalysis Predicts AWS AI Resurgence

Amazon shares rose 3% after a report from SemiAnalysis predicted an "AWS AI Resurgence." The report argued that while investors have focused on a potential "cloud crisis," the evidence suggests a turnaround for AWS, which generates 60% of Amazon's profits. The revival is being driven by AWS's partnership with Anthropic, a leading GenAI company. SemiAnalysis forecasts acceleration beyond 20% year-over-year growth by late 2025, driven by AWS's aggressive datacenter expansion.

Amazon shares rose 3% following a report from SemiAnalysis predicting an "AWS AI Resurgence." The report argued that while investors have been focused on a potential "cloud crisis," the evidence suggests a turnaround for AWS, which generates 60% of Amazon's profits. The revival is being driven by AWS's partnership with Anthropic, a leading GenAI company. SemiAnalysis forecasts acceleration beyond 20% year-over-year growth by late 2025, driven by AWS's aggressive datacenter expansion [1].

Amazon's cloud computing division, Amazon Web Services (AWS), is at the forefront of this resurgence. The company recently announced plans to invest over NZD $7.5 billion to build data centers in New Zealand, which will establish an "AWS Asia Pacific Region." This investment is expected to create over 1,000 full-time jobs annually and contribute NZD $10.8 billion to the country's GDP [2]. The new region will span three Availability Zones and will be the first infrastructure region in New Zealand.

AWS's expansion in New Zealand is part of a broader strategy to meet the growing demand for cloud services and support the digital transformation of organizations of all sizes. The company has been continuously expanding its infrastructure in the region since opening its first office in 2013, with investments in connectivity, edge locations, local zones, and direct connect services [1].

The partnership with Anthropic is also expected to play a significant role in AWS's AI resurgence. Anthropic is a leading GenAI company that specializes in developing large language models (LLMs) and generative AI capabilities. The collaboration between AWS and Anthropic is expected to accelerate the development and deployment of AI solutions, driving growth in the AI market [1].

Investors should closely monitor AWS's datacenter expansion and AI partnerships, as these factors are expected to drive significant growth in the company's revenue and profit margins. The recent rise in Amazon shares following the SemiAnalysis report suggests that investors are optimistic about AWS's prospects in the AI and cloud computing markets.

References:
[1] https://aws.amazon.com/blogs/aws/now-open-aws-asia-pacific-new-zealand-region/
[2] https://www.gurufocus.com/news/3088905/amazon-amzn-plans-44-billion-data-center-investment-in-new-zealand