Shares of Amazon.com Inc. hit a new high on Friday, as the e-commerce and cloud giant seems to have caught up to its main competitor in the race for artificial intelligence.
Last week’s 2024 AWS re:Invent conference was a big deal for the stock AMZN +1.92% because it was where Amazon Web Services (AWS) talked about its place in the world of generative AI and announced new services and technologies.
From an AI platform point of view, Oppenheimer analysts Timothy Horan and Jason Helfstein said that Amazon Web Services (AWS) has been “fairly far behind” Microsoft Corp.’s (MSFT +0.10%) peer Azure for the past two years. They said that it looks like AWS has “largely caught up” since the meeting.
Horan and Helfstein told clients on Friday that they still think AWS is the best company in the world at building cloud infrastructure and the tools that go with it. “AI was a big threat to its position as leader, but it looks like it has made the change well, though we are still in the early stages.”
Amazon’s stock was up 1.7% in the morning, which meant it was on track for a third straight record close.
It was also on track for its sixth straight gain. This would be the longest winning streak since November 7, 2023, when it stopped after eight days.
Microsoft shares, on the other hand, were up 0.2% and on track for their sixth straight gain. However, they were still 5.1% below their record finish of $467.56 on July 5.
Scott Devitt of Wedbush agreed with Horan and Helfstein. He said he has “increased conviction” in the rate of AWS growth and in “the health of Amazon’s competitive positioning relative to peers.”
Devitt said that Amazon has made “incredible progress” with its own chips, which are called Graviton, Trainium, and Inferentia. He also said that Wall Street seems to “underappreciate” Amazon’s AI infrastructure.
According to Devitt, the re:Invent conference had a lot of positive feedback from AWS executives, big enterprise customers, and partners, especially Anthropic. This shows that demand is strong across all three layers of the generative AI stack.
Oppenheimer and Wedbush both said again that they think Amazon’s stock will go up in value.
FactSet asked 71 analysts who cover Amazon to rate the stock. Of those, 67 are strong and 4 are neutral.
Stocks in Amazon have gone up 55.1% so far this year, while stocks in Microsoft have gone up 20.3% and stocks in the S&P 500, which has gone up 27.8%.
