Key points:
- Nvidia, Meta, Microsoft, and Amazon are the primary contributors to the recent rally in the stock market.
- The cloud segments of Microsoft (Azure), Amazon (AWS), and Google (Google Cloud) are driving the revenue growth in these companies.
The article discusses the AI contributions and revenue growth of the big three cloud companies: Microsoft’s Azure, Amazon’s AWS, and Google’s Google Cloud.
Azure experienced the strongest AI contribution, with revenue growth accelerating from 8.3% YoY in fiscal Q4 2023 to 17.7% YoY in fiscal Q2 2024. Azure’s AI services contributed 6 points to growth in Q2.
AWS showed accelerated growth in Q4, reporting 13.2% growth compared to Q3’s 12%. AWS is approaching a $100 billion annual run rate and remains the primary generator of operating income for Amazon.
Google Cloud revenue accelerated from 22% in Q3 to 26% in Q4, topping $9 billion for the first time. Google Cloud’s operating margin improved to 9% in Q4.
The article concludes that all three companies have seen increased customer migrations, larger contracts, monetization opportunities through subscriptions, and improvements in productivity and cost reductions.