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Amazon's (AMZN) Client Base Expands as FanDuel Selects AWS

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Amazon (AMZN - Free Report) is making every effort to strengthen its presence in the global cloud market, backed by its Amazon Web Services ("AWS") portfolio strength, which has been driving customer momentum.

The latest selection of AWS by FanDuel as the strategic cloud provider is a testament to the aforesaid fact. This highlights the efficiency and reliability of AWS’s innovative cloud products and services.

This move of FanDuel has added strength to its existing relationship with AWS.

Per the terms, FanDuel will leverage AWS’s cloud computing infrastructure to expand across the United States and Canada efficiently.

More precisely, it plans to utilize AWS Outposts and Local Zones to scale its business into new as well as existing markets.

FanDuel has already been using AWS edge solutions to boost its security and scalability and meet regulatory requirements.

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Amazon.com, Inc. Price and Consensus

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Strengthening Customer Base

The latest move by FanDuel has added strength to AWS’s customer base.

Apart from FanDuel, AWS was recently picked by the BMW Group as the preferred cloud provider. With the help of AWS’s compute, generative artificial intelligence, Internet of Things, machine learning and storage capabilities, BMW Group strives to power its automated driving platform.

Further, AWS was selected by Dr. Reddy’s Laboratories as the preferred cloud provider. Dr. Reddy’s shifted its SAP platform to AWS in a bid to boost the development of advanced healthcare applications. It strives to reduce application development time by 30%.

Occidental (OXY - Free Report) also chose AWS as its preferred cloud provider to boost operational efficiencies and eliminate upfront capital expenditures.

Occidental plans to transfer its core production applications and on-premises information technology infrastructure to AWS in order to accelerate its digital transformation and the development of systems for carbon removal plants.

Sumitomo selected AWS to drive its digital transformation by migrating its SAP environments to AWS. It plans to upgrade its SAP environment to SAP S/4HANA on AWS.

To Conclude

We believe that AWS’s expanding customer base will continue to drive its top-line growth. In second-quarter 2023, AWS generated revenues of $22.1 billion (17% of total sales), which grew 12% year over year.

Our model estimate for 2023 AWS revenues is projected at $91.6 billion, indicating growth of 14.4% from 2022.

The strengthening performance of AWS, which has become an integral part of Amazon, will likely instill investor optimism in the stock.

Amazon has gained 50.5% on a year-to-date basis.

AWS’s growing global clientele, on the back of its expanding portfolio and data centers and cloud regions, will continue to help the company gain a competitive edge against its peers, namely Microsoft (MSFT - Free Report) and Alphabet’s (GOOGL - Free Report) Google.

Amazon currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Microsoft Azure has become the key growth driver for Microsoft. The company is currently riding on the robust adoption of Azure cloud offerings. Azure's increasing number of global availability zones and regions, along with strength in its consumption-based business, is likely to continue driving Microsoft's cloud momentum in the near term.

Similarly, Google Cloud is contributing substantial growth to the total revenues of Alphabet. Expanding data centers, availability zones and cloud regions are expected to keep boosting Alphabet's cloud position.

Nevertheless, AWS, with solid customer momentum, continues to maintain its dominant position in the cloud market.

Per the latest Canalys report, AWS accounted for 30% of global cloud spending in second-quarter 2023, maintaining its leading position in the booming cloud market.

Microsoft’s Azure, the second-largest cloud service provider, accounted for 26% of worldwide cloud spending.

Alphabet’s Google Cloud represented 9% of cloud spending, making it the third-largest cloud provider.

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