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 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 major tech companies rose in the previous 2 years on the belief that massive datacenter requires for artificial-intelligence technologies would power financial investment for several years.

But that was before Chinese startup DeepSeek said it had attained AI developments at a portion of the expense, speeding up a selloff in innovation stocks that some say was overdue.

Still, Amazon might be better positioned than competitors to capitalize on more affordable AI, experts say, due to its huge cloud service and lower exposure to pricey large-language models that power apps like ChatGPT.

Amazon Web Services, the world's biggest cloud providers, is anticipated to post its greatest profits increase in 8 quarters at 19.3%, according to information assembled by LSEG.

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

"Microsoft and Google outcomes have actually put even more of a microscopic lense on Amazon's cloud development," said Dave Wagner, portfolio supervisor at Aptus Capital Advisors, which in all 3 technology business.

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

The company was the first huge cloud company to accept 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 2nd- and third-biggest cloud gamers, has stimulated some caution from analysts about AWS' performance.

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

Some analysts see the weakness at competitors as a sign that Amazon might have caught up in the AI race through efforts including doubling its investment in Anthropic and using a broad selection of AI designs on its cloud platform.

"We really believe that AWS is regaining share. It had been growing a lot slower than Microsoft Azure and Google Cloud for a time period, but our company believe 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 company has actually maintained a higher appraisal than a few 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 results are likewise most likely to gain from a healthy holiday shopping season, after competing retailers such as Target and a multitude of garments business released rosy forecasts over the previous month.

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

Data from Adobe Analytics revealed U.S. buyers spent lavishly online in between November and bbarlock.com December 2024, spending more than $240 billion, drawn by deep discount rates on whatever from TVs to toys.

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

Amazon has actually also tried to enhance shipment times and expanded item merchandise, including its focus on grocery, pharmacy and fashion - relocations experts state will help propel development.

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

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