By Deborah Mary Sophia

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

Shares of significant tech companies rose in the past two years on the belief that huge datacenter needs for artificial-intelligence innovations would power investment for several years.

But that was before Chinese startup DeepSeek said it had actually attained AI breakthroughs at a portion of the cost, speeding up a selloff in technology stocks that some state was overdue.

Still, Amazon might be much better positioned than rivals to capitalize on more affordable AI, analysts state, due to its enormous cloud business and lower exposure to costly large-language models that power apps like ChatGPT.

Amazon Web Services, galgbtqhistoryproject.org the world's biggest cloud companies, is anticipated to publish its strongest earnings boost in eight quarters at 19.3%, according to information put together by LSEG.

But Microsoft and Meta were both required to safeguard their AI budget recently, and shares of Google-parent Alphabet dropped 8% on Wednesday after it said it would be spending more on capex than experts anticipated.

"Microsoft and Google results have put even more of a microscopic lense on Amazon's cloud development," said Dave Wagner, portfolio manager at Aptus Capital Advisors, bytes-the-dust.com which holds shares in all 3 innovation companies.

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

The company was the very first big cloud company to embrace DeepSeek's AI models last month and has said its capital costs, mainly on AI, online-learning-initiative.org would be more than the $75 billion it approximated for 2024.

Slowing development at Microsoft Azure and Google Cloud, the 2nd- and players, has sparked some care 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 capacity constrained too and that's why its development rate isn't quite as much as what the market might have expected," said Bob O'Donnell, chief expert at TECHnalysis Research.

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

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

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

RETAIL STRENGTH

The e-commerce giant's results are also likely to gain from a healthy vacation shopping season, after rival retailers such as Target and valetinowiki.racing a variety of clothing business issued rosy projections over the previous month.

Amazon's North American sales for the 4th quarter are projected to rise 9% year-on-year. After a downturn in online sales growth earlier this year, analysts state Amazon is primed for a rebound in the retail business, which has actually affected its post-earnings share motions over the previous two quarters.

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

The vacation spending growth rate of 8.7% almost doubled from the 4.9% recorded in 2023, the data showed.

Amazon has likewise attempted to improve delivery times and broadened item merchandise, including its focus on grocery, drug store and fashion - relocations experts state will assist propel growth.

"Most indicators are that it was a good quarter. There was a great holiday for the customer therefore there's plenty of factor to think Amazon will have succeeded in that side of the company," Luria said.

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