Written by Sam Bogda
Jefferies said Friday that “some big clouds are moving in” at Amazon (NASDAQ 🙂 AWS.
The analysts, who have a buy rating and a target price of $165 per share on Amazon, told investors that the company hosted three Amazon Web Services experts, including an IT strategy consultant, a cloud engineer at VAR Consulting, and a junior founder who previously worked at AWS.
“Our experts unanimously agreed that AWS is the preeminent public cloud resource with a significant gap over Azure, its closest competitor. AWS’ leadership is largely a result of first-mover advantage, and our experts see no signs of losing AWS. – Beginning of the year means it has scale Bigger, more revenue and profit allowing it to reinvest billions in AWS each year, more customer references, and more trained developers who are familiar with the platform,” the analysts explained.
They added that AWS is the “easy and secure option” for large enterprises and start-ups, with large corporate IT buyers using AWS as the default option. However, they added, “cloud adoption has slowed as the overall storm clouds move in.”
“The three experts highlighted the slowdown in cloud adoption due to the vulnerability of the macro. Our IT expert noted that IT costs are under scrutiny, and overall pressures may continue into 2025. Our VAR expert noted that drooping fruits are the top priority, with a longer period Projects suspended from 6-8 months.First noticed a slowdown in demand 6-8 months ago,demand isn’t expected to pick up until Q2Q3 2013 after budgets become clearer.Our startup founder expert keeps cash , using AWS where possible rather than more expensive options other than AWS. He still expects infrastructure to double in the next year, though he hopes to find computational efficiencies to offset the additional costs,” Jefferies analysts continued.
Despite the overall pressures, Jefferies believes that cloud budgets are relatively secure, because despite increased cost scrutiny, “cloud projects can do better than other budget lines.”