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 lackluster reports jolted investor faith in Big Tech's billion-dollar investments in AI.

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

But that was before Chinese start-up DeepSeek said it had actually attained AI advancements at a fraction of the cost, speeding up a selloff in innovation stocks that some say was overdue.

Still, Amazon may be better positioned than rivals to capitalize on more affordable AI, analysts state, due to its huge cloud company and lower exposure to expensive large-language models that power apps like ChatGPT.

Amazon Web Services, the world's largest cloud companies, wiki.vst.hs-furtwangen.de is anticipated to post its strongest income increase in eight quarters at 19.3%, according to data put together by LSEG.

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

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

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

The company was the first big cloud supplier to accept 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, systemcheck-wiki.de the 2nd- and third-biggest cloud players, has actually triggered some care from experts about AWS' performance.

"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 development rate isn't quite up to what the market may have expected," said Bob O'Donnell, primary analyst at TECHnalysis Research.

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

"We in fact think that AWS is regaining share. It had been growing a lot slower than Microsoft Azure and Google Cloud for an amount of time, but we think 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 company has actually maintained a higher appraisal than some of its competitors, with a present forward price-to-earnings ratio of almost 39. Microsoft's forward P/E is 29 and Alphabet's 22.4, akropolistravel.com according to LSEG data.

RETAIL STRENGTH

The e-commerce giant's results are also likely to gain from a healthy vacation shopping season, yogaasanas.science after competing retailers such as Target and a variety of garments companies provided rosy forecasts over the past month.

Amazon's North American sales for the fourth quarter are predicted to increase 9% year-on-year. After a downturn in online sales development earlier this year, analysts state Amazon is primed for a rebound in the retail business, akropolistravel.com which has influenced its post-earnings share motions over the past two quarters.

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

The holiday spending growth rate of 8.7% practically doubled from the 4.9% taped in 2023, the data showed.

Amazon has likewise attempted to enhance delivery times and broadened item merchandise, including its focus on grocery, pharmacy and style - relocations analysts state will assist move development.

"Most indications are that it was an excellent quarter. There was a great vacation season for the customer therefore there's lots of reason to believe Amazon will have done well in that side of business," Luria said.

(Reporting by Deborah Sophia in Bengaluru