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 outcomes on Thursday, after Microsoft and Google's dull reports jolted investor faith in Big Tech's billion-dollar financial investments in AI.

Shares of significant tech business rose in the past 2 years on the belief that enormous datacenter needs for artificial-intelligence innovations would power financial investment for several years.

But that was before Chinese startup DeepSeek said it had actually attained AI breakthroughs at a portion of the expense, precipitating a selloff in technology stocks that some say was .

Still, Amazon may be better positioned than competitors to capitalize on less expensive AI, analysts state, due to its enormous cloud service and lower exposure to expensive large-language designs that power apps like ChatGPT.

Amazon Web Services, setiathome.berkeley.edu the world's biggest cloud services supplier, is expected to publish its strongest income boost in eight quarters at 19.3%, according to information assembled by LSEG.

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

"Microsoft and Google outcomes have actually put much more of a microscopic lense on Amazon's cloud growth," said Dave Wagner, portfolio manager at Aptus Capital Advisors, which holds shares in all 3 technology companies.

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

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

Slowing development at Microsoft Azure and Google Cloud, the 2nd- and third-biggest cloud gamers, has actually stimulated some caution 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 capability constrained as well and that's why its growth rate isn't quite up to what the market may have anticipated," said Bob O'Donnell, chief analyst at TECHnalysis Research.

Some experts see the weak point at competitors as an indication that Amazon may have caught up in the AI race through efforts consisting of doubling its financial investment in Anthropic and offering a large selection of AI designs on its cloud platform.

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

The business has maintained a greater appraisal than some of its rivals, with a present forward price-to-earnings ratio of almost 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 also likely to gain from a healthy vacation shopping season, after competing retailers such as Target and a slew of apparel business provided rosy forecasts over the past month.

Amazon's North American sales for the 4th quarter are predicted to rise 9% year-on-year. After a downturn in online sales development previously this year, analysts say Amazon is primed for a rebound in the retail organization, which has actually affected its post-earnings share motions over the past two quarters.

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

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

Amazon has also attempted to improve shipment times and broadened product merchandise, including its concentrate on grocery, drug store and fashion - moves experts say will help move development.

"Most indicators are that it was an excellent quarter. There was a good holiday for the customer and so there's lots of factor to believe Amazon will have succeeded in that side of business," Luria said.

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