Amazon (AMZN) is showing steady demand for its cloud business even as companies remain careful with spending. Its cloud unit, Amazon Web Services (AWS), has signed a multi-year cloud and AI deal with Prosus NV (PROSF). The deal comes ahead of Amazon’s fourth-quarter fiscal 2025 earnings, scheduled for Thursday, February 5.
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The three-year deal is worth hundreds of millions of dollars, according to Prosus, though the company did not share the exact amount. Under the agreement, Prosus will move its cloud and AI work to AWS and use Amazon’s data centers across multiple regions. Prosus will also work with Amazon’s teams to scale its AI tools while keeping costs under control.
For Q4, the Street expects Amazon to post adjusted earnings per share (EPS) of $1.97, higher than the prior year period’s figure of $1.86. Sales are expected to increase 12.6% year-over-year to $211.44 billion.
Cost Savings Drive AMZN’s Cloud Demand
The deal shows that companies are still spending on cloud and AI, as it helps reduce costs. By shifting and standardizing its systems on AWS, Prosus expects to reduce expenses while rolling out AI tools more efficiently across its businesses.
For Amazon, the agreement supports demand for long-term cloud contracts at a time when many companies are keeping a close watch on budgets. It also shows that AI-related cloud spending remains resilient, helping support steady demand for AWS even in a cautious environment.
As the chart shows, AWS has built a larger backlog of future cloud revenue, reflecting steady customer commitments.
What Is Amazon’s Stock Prediction?
On TipRanks, Amazon stock has a Strong Buy consensus rating based on 35 Buys and one Hold rating. The average Amazon price target of $298.53 implies 25.1% upside potential from current levels. Over the past year, AMZN shares have lost 1.4%.
