Ray Charles wasn’t the only one whose heart was in Georgia. Amazon (Amazon) Love this place too.
The Seattle-based technology giant said on January 7 that its Amazon Web Services plans to invest approximately $11 billion to expand infrastructure in Georgia to support cloud computing and artificial intelligence technology.
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“Generative AI is driving growing demand for advanced cloud infrastructure and computing power, and AWS’ investment will support the future of AI in Georgia data centers,” the company said in a statement.
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Amazon said it has invested $18.5 billion in Georgia since 2010, contributing $20.1 billion to the state’s gross domestic product.
The latest investment is expected to create at least 550 jobs and is another example of big tech companies’ big plans for artificial intelligence.
Amazon CEO touts cloud services
Amazon, Microsoft (Microsoft Corporation) Facebook parent platform (Mehta) and alphabet (Google) According to Forbes, the companies that own Google expect to spend more than $25 trillion this year, mainly on artificial intelligence infrastructure.
According to Forbes, in the first half of 2024, large technology companies spent nearly US$104 billion, a 47% increase from the same period last year. As of the third quarter, the amount soared to $170 billion, a 56% year-over-year increase.
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Software giant Microsoft said in a blog post on January 3 that it expects to spend US$80 billion in fiscal 2025 to build data centers that can handle artificial intelligence workloads. More than half of expected AI infrastructure spending will occur in the U.S.
AWS has certainly paid off for Amazon, generating $27.5 billion in revenue in the third quarter of 2024, an annual increase of 19%. This accounts for about one-sixth of Amazon’s total revenue of $158.9 billion, an increase of 11% from the same period last year.
During Amazon’s third-quarter earnings call in October, Chief Executive Andy Jassy told analysts: “We’ve seen AWS’ growth accelerate significantly over the past four quarters.
“The AWS team continues to make rapid progress in delivering AI capabilities to customers to build substantive AI businesses. In the past 18 months, AWS has released nearly twice as many machine learning and [generative AI] Integrates with capabilities from other leading cloud providers.
Amazon is due to report quarterly results next month, and its shares are up about 53% from the same period last year.
Cantor Fitzgerald raises Amazon stock price target
Investment companies have recently been releasing research reports on Amazon.
Cantor Fitzgerald analyst Deepak Mathivanan raised the investment firm’s price target on Amazon to $270 from $240 and affirmed an overweight rating on the stock as part of a broader report on internet stocks.
The company said fundamentals for Internet stocks remain healthy heading into 2025, despite emerging risks such as President-elect Donald Trump’s tariff proposals.
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The analyst said the pace of innovation in areas such as artificial intelligence, self-driving cars, robotics and quantum computing is accelerating.
Mathivanan said he expects digital advertising, e-commerce and mobile travel to achieve strong growth and margin expansion in 2025.
Amazon is one of the company’s top picks for the 2025 theme of accelerating artificial intelligence deployment.
Wedbush and Loop: Amazon shares rise
Wedbush analyst Scott Devitt raised his price target on Amazon to $260 from $250 and maintained an outperform rating on the stock while naming it a top pick for 2025.
Devitt said that investors have underestimated AWS’s revenue growth and improvement trends, which has led to accelerated growth in cloud computing for four consecutive quarters.
Amazon’s revenue growth ranks among the best among its large online peers. Wedbush said that Amazon’s operating income is expected to increase by 24% annually in 2025, higher than Google and Meta Platform.
Loop Capital analyst Rob Sanderson reiterated a buy rating and $275 price target on Amazon while predicting further gains in 2025.
In addition to the long-term and exciting strong demand expected for AWS, Amazon’s profit outlook is also very favorable for its retail business, the company said.
The company’s mandate to return to offices five days a week is also in effect at most locations. Loop said that will result in some attrition that may be skewed toward higher-paid employees. While this is difficult to quantify, it will provide a boost to margins in 2025, Loop said.
According to GeekWire, Amazon’s RTO policy is frustrating working parents, who value the flexibility and cost savings they’ve grown accustomed to over the years with remote and hybrid work.
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Amazon said in a statement to GeekWire that it recognizes that people sometimes need the flexibility to work from home. In these cases, “employees should communicate with their managers — just as they did before the pandemic.”
The trend back to the office appears to be gaining momentum.
On January 7, Bloomberg reported that JPMorgan Chase was preparing to have all employees return to the office five days a week, ending the hybrid work option for thousands of employees.
Recent surveys show that 23% of U.S. companies require employees to work in the office five days a week. Most companies opt for hybrid model, requiring employees to work three days a week
Meanwhile, a Resume Builder survey found that one in five employees is not following the company’s RTO policy.
20% of employees said they would be likely to leave if the company started cracking down on compliance, and another 33% were likely to follow suit.
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