Amazon.Com, Inc
Analysts estimate that Microsoft does not explicitly report revenue for Azure, which has grown from half the size of AWS five years ago to approximately three-quarters of its size today, CNBC reports.
Analysts see Azure's growth potentially reaching $95 billion in two years, helping shift investor optimism to the flagship Microsoft Cloud segments in 2024.
According to analysts, Microsoft successfully channeled its early lead in this new AI wave into a rarified $3 trillion market cap.
CEO Satya Nadella noted that the company now serves 53,000 Azure AI customers.
AWS, in response, has expanded its offerings to include various models, including those from Anthropic, alongside its proprietary AI processors, as Amazon CEO Andy Jassy noted.
He emphasized AWS's extensive collection of Nvidia Corp
Analysts also see Amazon as a dominant player within the cloud and a challenging competitor within generative AI.
Microsoft's cloud infrastructure's rapid growth significantly contributes to the company's revenue, accounting for about 29% of total revenue.
This growth has also become a substantial profit contributor, with the Intelligent Cloud segment, which includes Azure, generating 46% of Microsoft's total operating income, as per CNBC.
The gross margin in Microsoft's cloud group has dramatically improved, reflecting the company's efficiency improvements and high-margin services offered to developers.
Price Actions: Microsoft shares traded lower by 0.30% at $419.29 on the last check Monday.
