Amazon rallies on cloud recovery as it chases Microsoft for AI business

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Amazon.com rallied 5% on Friday on strong growth at its most profitable cloud business as it aims for a larger share of the booming artificial intelligence market in a race with Microsoft.

was on track to add more than $60 billion to its market capitalization based on its premarket share price of $125. Smaller cloud rivals Microsoftthe cloud business was stabilizing as large expansions with existing customers and first-time agreements were likely to aid growth in the final three months of the year.

Wall Street cheered the positive commentary for the business that brings in almost all of Amazon's profit, but had slowed after the pandemic as customers cut costs. About 26 brokerages raised their price targets on the stock, pushing their median view to $173, according to LSEG data. "Amazon Web Services optimization has stabilized, although growth fell slightly shy of our expectations," Morningstar analyst Dan Romanoff said.Amazon trades at 38.49 times its 12-month forward earnings estimates, compared with Microsoft's 27.85 and Alphabet's 18.66.

 

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