The revolution of artificial intelligence (Ai) is well executed. According to most estimates, the AI market is expected to increase by 30% or more per year over the next decade. However, as with any boom, it can be difficult to say which business will eventually benefit.
Few lay people think Amazon(Nasdaq: amzn) as in stock. Many also do not look at it as infrastructure stocks. However, most of Amazon’s profits are currently determined by the development and maintenance of AI infrastructure. All of this is in a unit called Amazon Web Services, or AWS briefly. Even if you are familiar with this unit, you will probably surprise you what it dominates.
Last quarter, AWS ordered 30% of the global CLoud Infrastructure market share. Almost every AI business worldwide is based on cloud infrastructure to train, implement and carry out its models. Otherwise, these businesses will need to buy, assemble and manage their calculation infrastructure – a very expensive and slow choice. Instead, cloud infrastructure suppliers, such as AWS, allow AI developers to repeat quickly, creating infrastructure every day or even a second.
It is difficult to overestimate how impressive the AWS market is. The other two biggest competitors – Microsoft and Alphabet – merge only for 33% of the market. After their market, the market share is reduced from the rock. Fourth place Alibaba has only 4% market share. By controlling almost a third of the global cloud infrastructure markets, AWS became the leader of AI infrastructure. Few competitors can reconcile its scale or ability to invest in growth.
Image Source: Getty Images.
According to McKinsey & Co, the cost of cloud infrastructure has already exploded. “However, when the generative AI (Geni) appears, it concludes that the company’s investigation is even increased.” This cost growth can be encouraged by AI. The McKinsey & Co estimated that about 70% of the new cloud infrastructure will be created to meet specialized needs of artificial intelligence and machine learning business.
The latest AWS income report proves that this increase in expenditure is not just a forecast – this is currently a reality. Sales for the division increased by 17.5% per year in the last quarter. Meanwhile, operating income increased by only 10%. However, smaller margins usually reflected the huge amazon capital costs. This year, Amazon expects to spend a record $ 118 billion, expanding its infrastructure to meet the rapidly growing AI industry needs.
During the AWS Amazon, there are undoubtedly AI infrastructure arrows in the center. However, the company is only AWS. Here is also a huge Amazon e -commerce business. And while AWS contributes to most of Amazon’s revenue, most of the company’s revenue is still associated with e-commerce-business with a very different economy. Many analysts even predicted that AWS could be directed to a separate entity. But so far, business remains under one umbrella, forcing investors to buy both to buy a place at the table.
Should you buy Amazon shares just for AWS exposure? Probably not. Other companies such as Microsoft and Alfabas are definitely focused on AI. Microsoft is highly invested in the open AI, which manages the Chatgpt. Meanwhile, the CEO of Alphabet, a Google parent company, has recently called an invention that is valuable as a fire or electricity. Given that the focus was on the focus, both companies will be much more invested in the entire AI boom than there is a total of Amazon, taking into account the huge impact of e -commerce.
However, Amazon will remain an AI infrastructure for heavyweight years to come. And if it can be convenient for investors that they also have an expanded electronic commercial department, Amazon’s shares remain a great way to quickly find out one of the best AI infrastructure companies on the market today.
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Ryan Vanz has no position in any of the above shares. Motley Fool has positions and recommends alphabet, Amazon and Microsoft. The Motley Fool recommends the Alibaba Group and recommends the following options: 2026. January 395 USD calls Microsoft and short in 2026. January $ 405 Microsoft calls. The Motley fool has a disclosure policy.
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