The Cloud's Profitability and AI Dependence for Big Tech

Analysts are predicting the slowest revenue growth for Microsoft's Azure and Amazon Web Services since the firms started breaking out performance last decade. In the first three months of 2023, growth for Microsoft's Azure unit and Amazon Web Services is expected to fall to 31% and 14%, respectively, excluding currency fluctuations. Wall Street has been getting more cautious, with UBS lowering growth estimates for Azure last week, and Jefferies seeing slowing cloud demand as "a key concern" for Amazon. However, some investors believe the slowdown is temporary and that cloud computing still has a lot of runway ahead.