Amazon Capex Plans Signals Demand for AWS Still Outpaces Supply
Amazon is planning to allocate more than $100 billion in capital expenditure this year as part of a push to build generative AI services. UBS analysts in a research note say the capex plans are a sign of higher demand, particularly as demand for on-premise to cloud infrastructure continues as IT budgets return to form. They estimate that about 70% will be allocated to Amazon Web Services. “Even as Amazon and the broader industry continues to face a shortage in chips/components, we believe the main takeaway here is that demand for AWS continues to outpace supply,” they say. Shares tick down 2.7% premarket after 1Q sales and operating income projections came up short of Wall Street’s expectations.
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