Amazon and Microsoft are currently the two largest providers of public cloud services. That business is generating nearly $50 billion a year in revenue now between the two and is expected to double by the end of 2020


⇑⇓ Stock Market News ⇑⇓

Can and Microsoft keep their cloud businesses growing strong? It’s the new $1.6 trillion question.

The pair are now the two most valuable companies in the world, with Amazon having recently overtaken Microsoft for the top slot. But market values now at roughly $800 billion apiece mean that investors have placed rather large bets on both.

Amazon shares have popped nearly 29% over the last year while Microsoft has gained about 17%. That is well ahead of most of their Big Tech peers. Apple Inc., valued at more than $1 trillion less than three months ago, is down 13% over the last 12 months.

Trading Simulator. Free Demo.

High values come with high hopes for the coming fourth-quarter earnings season as well as for the full year. Many large tech companies, including Apple, Facebook and Google-parent Alphabet Inc., are watching costs rise faster than revenues, pressuring their bottom lines.

Reflecting this, 58% of the tech companies on the S&P 500 that are slated to report results for the December-ending quarter are expected to show earnings growth lagging revenue growth for the period, according to an analysis of data from S&P Capital IQ.


Today’s Stock Market News

Amazon and Microsoft, however, are expected to show the opposite. Amazon is seen reporting a 74% surge year over year in operating earnings for the fourth quarter compared with a 19% gain in revenue for the period. Microsoft’s operating income is estimated to have risen 18% relative to a 13% increase in revenue for the same period. Wall Street currently projects a similar pattern for the March quarter.

The two very different companies, whose businesses have been diverging of late, have a common growth engine. Amazon and Microsoft are currently the two largest providers of public cloud services that corporate customers use to offload their computing and software needs.

That business is generating nearly $50 billion a year in revenue now between the two and is expected to double by the end of 2020. The cloud business bolsters the margins of both companies; 60% of Amazon’s trailing 12-month operating earnings came from its AWS cloud segment, which accounted for only 11% of the company’s revenue in that time.

Keeping up that momentum will be key to both companies maintaining their towering market values. That shouldn’t prove a problem for now. Demand for corporate cloud services is expected to remain strong this year; a survey by Goldman Sachs last month found chief information officers intending to move more computing tasks this year to public cloud services like Amazon’s AWS and Microsoft’s Azure.

⇑⇓ Start Trading ⇓⇑ – CFD Service. 80.6% lose money

That despite an expected downtick in overall corporate technology spending for the year. A growing cloud is still a pretty safe bet for investors—even if that bet totals $1.6 trillion.

Categories: Amazon Inc, Business, Microsoft Corp

Tags: , , , , , , ,

9 replies


  1. Snap Inc. in recent weeks pushed out two senior executives after an investigation found that one of them had allegedly engaged in an inappropriate relationship with an outside contractor – Stock Market News Today
  2. Amazon recently expanded its nascent home-delivery service, called Amazon Shipping, beyond test markets in London and Los Angeles – Stock Market News Today
  3. Asian stocks rallied to a seven-week high, buoyed by gains in U.S. technology firms – Stock Market News Today
  4. Chief Executive Officer Mark Zuckerberg is planning to unify the underlying messaging infrastructure of its WhatsApp, Instagram and Facebook Messenger services – Stock Market News Today
  5. Brands Invent New Lines for Only Amazon to Sell. Amazon gets exclusive products, while brands receive faster customer feedback, marketing support and increased sales – Stock Market News Today
  6. Alibaba’s Revenue Jumps Despite China Slowdown, net income increased 37% in the just-ended quarter – Stock Market News Today
  7. Thousands of products were pulled from Inc.’s India website Friday — the first direct impact from the country’s new e-commerce rules – Today’s Stock Market News
  8. Artificial-Intelligence: Microsoft Corp. Said That It Would Invest $1 Billion In Artificial-Intelligence Startup OpenAI – Stock Market News Today
  9. Artificial-Intelligence: Microsoft Corp. To Invest $1 Billion In AI Startup OpenAI – Stock Market News Today

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: