Analyst Say, AI Is The Key Driver For Amazon Cloud Service

Amazon Web Services’ cloud activities will benefit from the growth of artificial intelligence products that generate income and profit margins, according to Oppenheimer analyst, Jason Helfstein. It raised its price target to $2,085, a 16% premium over the current price of $1,807 and maintained its best performance.

Amazon is increasingly interested in integrating highly profitable AI products that enable cloud customers to increase their productivity and revenue. The e-commerce giant itself makes intensive use of artificial intelligence to focus on placing products and advertising on its own website.

According to Helfstein, AI can generate revenues and margins from AWS, through which solutions are integrated into cloud services. In addition, competitors will find it intricate to contest Amazon’s R & D investments, considering its market position, more than double the nearest competitor, Microsoft, in the fast-growing industry.

AWS, which accounts for most of Amazon’s corporate profits, will increase its margins by 28% in 2018 to more than 33% compared to consensus estimates, according to Helfstein. AWS had revenues of more than $25 Billion in 2018, a 45% increase over the previous year.

Recent documents for the first problem put the Amazon domain in the segment as the favored cloud service source. At the IPO, Pinterest announced intends to spend over $400 Million over 5 Years, while Lyft recently inked a $300 Million commitment to use Amazon’s services. Both said the commotion of Amazon’s cloud network was hazardous for businesses.

Despite Amazon’s accomplishments in using AI in its core businesses, the company is already struggling with technology. Amazon discarded an AI recruiting tool that was biased against women. The error in the tool comes from the historical database because the curricula are dominated by male candidates. Corrections in the algorithm results were insufficient and the program was abandoned in 2017.