Amazon's (AMZN) AWS Boosts Prospects With Navy Contract Win
Amazon AMZN continues to ride on strengthening Amazon Web Services ("AWS") offerings, which are constantly driving the company's cloud customer momentum.
AWS’ recent win of a five-year enterprise software license contract, which was awarded by the United States Navy, remains noteworthy. This highlights the efficiency and reliability of AWS' innovative cloud products and services.
Notably, the contract will provide the U.S. Navy access to AWS’ commercial cloud environment and professional services. It will also be able to avail AWS training and certification courses.
This $723.9 million deal comes right after the Pentagon’s recent declaration of Amazon, Alphabet GOOGL, Microsoft MSFT and Oracle ORCL as the winners of the multibillion-dollar cloud computing contract for the Joint Warfighting Cloud Capability.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Portfolio Strength – Key Catalyst
AWS’s growing efforts toward expanding its portfolio offerings are likely to continue adding strength to its customer base.
Recently, AWS introduced a new data management service, namely Amazon DataZone, which eases the data management process and enables data producers to govern data access seamlessly.
Further, the company bolstered its ML strength by introducing eight new capabilities for Amazon SageMaker namely, Role Manager, Model Cards, Model Dashboard, new data preparation, collaboration across data science teams, automated model validation, geospatial capabilities and Automatic conversion of notebook code into production-ready jobs.
The company announced a new service called Amazon Security Lake, which is a purpose-built security data lake. It automatically centralizes an organization’s security data from cloud and on-premises sources into a purpose-built data lake.
It also announced a fully managed compute service, namely AWS SimSpace Weaver, that enables customers to deploy spatial simulations to model dynamic systems with many data points.
Further, it announced a new cloud application called AWS Supply Chain, which provides improved supply chain visibility to businesses.
Additionally, it introduced a new analytics service called AWS Clean Rooms that helps customers analyze and collaborate on collective datasets without revealing underlying data.
Bottom Line
We believe that portfolio strength will continue to drive AWS’ customer momentum, which, in turn, will aid Amazon in sustaining its cloud dominance. This will instill investor optimism in the stock in the days ahead.
Notably, Amazon has lost 43.6% on a year-to-date basis.
Recently, AWS was selected by Yahoo as the preferred public cloud provider for the latter’s advertising technology business, Yahoo Ad Tech.
Further, it was picked by Brookfield Asset Management as the preferred cloud provider. Also, Stability AI selected AWS as the preferred cloud provider. With the aid of AWS’s robust portfolio of cloud technologies and global infrastructure, Stability AI strives to build and scale its AI models.
We believe that the expanding customer base will continue to drive AWS’s top-line growth. In third-quarter 2022, AWS generated revenues of $20.5 billion (16% of total sales), which grew 27% year over year.
Further, expanding its portfolio and customer base will likely continue to aid Amazon, currently carrying a Zacks Rank #3 (Hold), in gaining a competitive edge against its peers, Microsoft, Alphabet’s Google and Oracle, which are also making strong efforts to strengthen cloud footprint.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
According to the Canalys report, AWS accounted for 32% of global cloud spending in third-quarter 2022, maintaining its leading position in the booming cloud market.
Microsoft’s Azure, which is currently riding on the robust adoption of its cloud offerings, increasing number of global availability zones and regions and strength in its consumption-based business, was marked as the second-largest cloud-service provider as it accounted for 22% of worldwide cloud spending.
Alphabet’s Google Cloud, which is strongly gaining from a solid portfolio, expanding data centers, availability zones and cloud regions, represented 9% of cloud spending, making it the third-largest cloud provider.
Meanwhile, Oracle continues to benefit from the solid momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure services and Autonomous Database offerings. Solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management, remains a positive.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
