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Jan 23 (Reuters) – A slowdown in cloud spending by inflation-hit businesses has stalled sales momentum for Amazon.com (AMZN.O) and Microsoft (MSFT.O), laying off sectors is expected to contribute to the trouble of Thousands this month.
After years of blazing growth, most recently driven by remote working and studying during the pandemic, demand for the cloud has cooled over the past nine months, and sales growth could slow further, he said. the list said.
According to research firm Gartner, end-user cloud spending on services such as the world’s largest provider Amazon Web Services (AWS) and Microsoft’s Azure will grow 18.8% in 2022 and 52.8% in 2021, before growing by 18.8% this year. It is expected to increase by 20.7%. .
“Many companies are delaying their move to the cloud or seeking price cuts on existing plans,” said Rishi Jaluria, an analyst at RBC Capital Markets.
Microsoft CEO Satya Nadella said last week that companies were cautious because “some parts of the world are in recession and others are expecting it.” rice field.
context
According to Visible Alpha, Azure is set to grow 31% in the December quarter, the weakest growth since the Redmond, Wash.-based company began releasing unit numbers in 2015.
AWS, Amazon’s profitable cloud business, earning more than a quarter of its revenue, is expected to see a 24% increase in revenue this quarter. It increased by 28% over the July-September period.
Analysts said the slowdown also weighed on Alphabet (GOOGL.O), the third-largest cloud provider, and is seen as a sign of maturity in the overall market.
“Easy-to-move” workloads are already in the cloud, making it difficult for providers to encourage companies to move the next batch of workloads to their platform, brokerage firm UBS said earlier this month. was
Microsoft has also been hit by a downturn in the PC market, where its Windows software is still the dominant operating system. Amazon is also feeling the heat from slowing retail demand.
foundation
* Microsoft’s second quarter revenue is expected to grow 2.5% to $53 billion, the slowest growth in six years.
* Amazon’s fourth quarter revenue is expected to grow 5.8% to $145.4 billion.
wall street emotions
* 47 out of 53 analysts rate Microsoft stock as Buy or higher, with a median price target of $285.
* Microsoft stock has fallen 19% in the last 12 months.
* 48 out of 52 analysts rate Amazon stock as Buy or better, with a median price target of $135.
* Amazon’s stock has fallen 32% in the last 12 months.
Reported by Aditya Soni and Yuvraj Malik, Bengaluru. Edited by Anil D’Silva
Our Standards: Thomson Reuters Trust Principles.
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