Amazon (AMZN - Free Report) is making strong efforts toward capitalizing on the growing demand for Machine Learning (ML) based cloud services.
This evident from its latest move where its cloud computing arm, Amazon Web Services (AWS) made Amazon Personalize available to general customers. Notably, it helps in training and deployment of private machine learning models.
Notably, the new service is a fully managed one that aids in development of applications by managing the entire machine learning pipeline which includes algorithm selection, processing data, feature identification, and optimizing and hosting the results.
During the application development, users will be able to address specific product recommendations, customized direct marketing and individualized search results.
The latest step of the company strengthens ML-based services portfolio which also offers Amazon SageMaker that aids in building, training, and deploying machine learning models at any scale seamlessly.
Moreover, expanding key offerings are likely to bolster the company’s cloud customer base which in turn will drive AWS revenues.
New Service to Aid Growth
Amazon Personalize positions the company well to reap benefits from the booming Machine Learning as a Service market (MLaaS) which is riding on growing proliferation of cloud-based technologies.
Per a report from Mordor Intelligence, global MLaaS market is expected to witness a CAGR of 43% between 2019 and 2024.
Further, growing ML initiatives of Amazon holds promise in the near future as well as in the long haul. Moreover, these are likely to help the company in rapidly penetrating the global ML market which according to a report from Research on Global Markets, is anticipated to hit $19.4 billion by 2023 at a CAGR of 48.3% between 2018 and 2023.
Intensifying Cloud Competition
Growth opportunities in the MLaaS market are alluring enough to lure other cloud service providers to make advances as well.
Apart from Amazon, Microsoft’s (MSFT - Free Report) Azure and Alphabet’s (GOOGL - Free Report) Google Cloud are also leaving no stone unturned to bolster presence in this potential market. Like Amazon Machine Learning, Azure Machine Learning and Google Cloud AI also offer MLaaS services to customers.
Nevertheless, expanding ML-based cloud services portfolio of Amazon is likely to aid its momentum across customers. The company has already gained traction among customers such as Yamaha, Subway, Zola and Segment which are utilizing Amazon Personalize.
All these are anticipated to aid Amazon’s dominance in the global cloud computing market.
Per a MarketsandMarkets report, the market is expected to reach a value of $623.3 billion by 2023 from $272 billion in 2018 at a CAGR of 18% between 2018 and 2023.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology sector that can be considered is PayPal Holdings, Inc. (PYPL - Free Report) which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for PayPal is pegged at 17.91%.
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