AWS Roars Ahead of Azure as Amazon Looks More Attractive

Amazon and Microsoft both reported impressive earnings results, but their strategies differ. Amazon's AWS (Amazon Web Services) experienced its fastest growth in 18 quarters at 37% year-over-year, while Azure grew 43%. Andy Jassy said AWS is 'booming' with AI and Chips businesses exceeding $25 billion run rates.

Microsoft's Intelligent Cloud jumped 32%, but More Personal Computing slipped 4%, signaling a shift away from Windows and Xbox. Satya Nadella emphasized advancing the cost-to-outcome curve, while Amazon focuses on building a full stack including Trainium and Graviton silicon, Bedrock foundation models, and Zoox robotaxis.

Amazon's operating income jumped 43.24% year-over-year despite increased capital expenditures, which surged 68.44%. Microsoft, with its focus on Azure, faces potential risks from GPU depreciation and OpenAI profit-sharing. With a trailing P/E of about 22, Amazon looks more attractive for steady compounding and has a 0.77% dividend.