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Amazon (AMZN) Teams Up With Amgen, Expands Customer Base

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Amazon (AMZN - Free Report) continues to ride on the strength of its Amazon Web Services ("AWS") offerings, which are constantly driving its cloud customer momentum. Its latest partnership with Amgen (AMGN - Free Report) is a testament to the same.

On the back of this partnership, Amgen expands the usage of AWS’ cloud platform. It intends to develop generative AI-based solutions to accelerate advanced therapies and boost the manufacturing throughput of medicines on the back of AWS’ robust generative AI and Machine Learning (“ML”) capabilities.

AMGN is leveraging Amazon SageMaker to ease the process of collecting and analyzing manufacturing data points daily at its new facility, which will open in 2024.

Amgen is also using AWS’ global infrastructure to support its new digital data and analytics platform.

It is using Amazon Bedrock and Amazon SageMaker JumpStart to boost the efficiency of its operations.

The latest partnership highlights the efficiency and reliability of AWS’ innovative cloud products and services.

Expanding Customer Base

Amgen's latest move has added strength to AWS’ customer base.

AWS was recently selected by Hyundai as the preferred cloud provider. The latter intends to support its digital transformation on the back of AWS. Also, SCAYLE picked AWS as the preferred cloud provider.

Mitsubishi UFJ Financial Group (MUFG) picked AWS as its preferred cloud provider. MUFG intends to support its digital transformation by leveraging AWS’ generative AI and ML capabilities.

Aerodyne, a drone solution provider, has gone all-in on AWS to solve complex industrial issues with drone data.

Cathay has recently selected AWS as its strategic cloud partner to establish the Cathay Machine Learning Innovation Hub.

The Bank of Ayudhya Public Company Limited (Krungsri) has also chosen AWS to boost its digital transformation and accelerate the financial inclusion drive in Thailand.

We believe that AWS’ expanding customer base will continue to drive its top-line growth. In third-quarter 2023, AWS generated revenues of $23.1 billion (16.1% of total sales), which grew 12.3% year over year.

Our model estimate for 2023 AWS revenues is projected at $92.8 billion, indicating growth of 15.8% 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 74.5% on a year-to-date basis.

To Conclude

We believe that AWS’ growing global clientele, on the back of its expanding portfolio as well as 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 carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Microsoft Azure has become Microsoft's key growth driver. 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 Alphabet's total revenues. 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 Synergy Research Group data, AWS accounted for 32% of the global cloud infrastructure services market in third-quarter 2023, maintaining its leading position in the booming cloud market.

Microsoft’s Azure, the second-largest cloud service provider, accounted for 23% of the market.

Alphabet’s Google Cloud acquired 11% share of the market, making it the third-largest cloud provider.

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