By Deborah Mary Sophia

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

Shares of major tech business surged in the previous 2 years on the belief that enormous datacenter requires for artificial-intelligence innovations would power financial investment for many years.

But that was before Chinese start-up DeepSeek said it had attained AI breakthroughs at a fraction of the expense, precipitating a selloff in technology stocks that some state was overdue.

Still, Amazon might be better positioned than competitors to profit from more affordable AI, analysts state, due to its huge cloud organization and lower direct exposure to expensive large-language designs that power apps like ChatGPT.

Amazon Web Services, the world's biggest cloud services company, is expected to post its greatest earnings increase in eight quarters at 19.3%, according to data assembled by LSEG.

But Microsoft and Meta were both forced to defend their AI spending plans last week, and shares of Google-parent Alphabet dropped 8% on Wednesday after it said it would be investing more on capex than experts prepared for.

"Microsoft and Google results have actually put a lot more of a microscope on Amazon's cloud growth," said Dave Wagner, portfolio manager at Aptus Capital Advisors, which holds shares in all three technology companies.

"But if Amazon can squash it on their cloud numbers, the marketplace's going to absolutely love that report."

The business was the first huge cloud service provider to embrace DeepSeek's AI models last month and has said its capital spending, mainly on AI, would be more than the $75 billion it estimated for 2024.

Slowing growth at Microsoft Azure and Google Cloud, the second- and third-biggest cloud gamers, pediascape.science has sparked some care from experts about AWS' efficiency.

"Microsoft said it was capability constrained, Google said it was capability constrained. More than likely, Amazon is going to state it might have been capacity constrained as well and that's why its growth rate isn't quite as much as what the market may have anticipated," said Bob O'Donnell, primary expert at TECHnalysis Research.

Some analysts see the weakness at competitors as an indication that Amazon may have captured up in the AI race through efforts including doubling its investment in Anthropic and providing a broad selection of AI designs on its cloud platform.

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

The business has actually maintained a greater appraisal than some of its rivals, with a present forward price-to-earnings ratio of nearly 39. Microsoft's forward P/E is 29 and Alphabet's 22.4, according to LSEG data.

RETAIL STRENGTH

The e-commerce giant's outcomes are likewise likely to gain from a healthy vacation shopping season, after rival retailers such as Target and a multitude of clothing companies released rosy forecasts over the past month.

Amazon's North American sales for the fourth quarter are predicted to rise 9% year-on-year. After a slowdown in online sales growth earlier this year, experts say Amazon is primed for a rebound in the retail company, which has influenced its post-earnings share motions over the past two quarters.

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

The holiday costs development rate of 8.7% almost doubled from the 4.9% tape-recorded in 2023, the data revealed.

Amazon has also tried to enhance shipment times and expanded product merchandise, including its focus on grocery, pharmacy and fashion - relocations experts say will assist move growth.

"Most indicators are that it was a great quarter. There was an excellent holiday for the customer therefore there's a lot of reason to think Amazon will have done well because side of the organization," Luria said.

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