Amazon reiterated as Top Pick at Mizuho amid a ‘tipping point for cloud migration’

Amazon reiterated as Top Pick at Mizuho amid a ‘tipping point for cloud migration’

Amazon reiterated as Top Pick at Mizuho amid a 'tipping point for cloud migration'


Mizuho Securities analysts reiterated Amazon (NASDAQ:AMZN) stock as their top pick, citing “signs of accelerating sales cycle” within the company’s AWS division amid growth of executive business center (EBC) meetings “and early exits of on-prem data center contracts.”

Historically, deals tend to be finalized 60 days post-meeting, a significant improvement over the usual 90-day sales cycle.

Moreover, surveys reveal that AWS customers are terminating their on-premise data center contracts more rapidly than before through prepayments, indicating faster migration to AWS and an increase in sales cycle velocity, analysts said.

Mizuho also noted that the company’s budget for the fiscal year 2024 points to a significant shift towards infrastructure spending, suggesting an accelerated migration of workloads to AWS.

Two key drivers behind this trend include AWS customers focusing more on moving key mass of data into the cloud for generative AI deployment for the long-term and existing data in the cloud being “upgraded to vectorized or unstructured data warehousing to optimize for Gen-AI.”


Lastly, Mizuho noted that consumption levels are expected to return to historical norms, implying a potential 20% year-over-year growth in AWS spending.

Analyst at Mizuho Securities are bullish on Amazon (AMZN) and consider it their top pick citing a potential boom in cloud computing. They believe several factors are converging to create a “tipping point” for cloud migration:

  • Faster sales cycles for Amazon’s cloud division, AWS
  • Companies are moving more data to the cloud for advanced AI applications
  • Businesses are upgrading their cloud storage to handle new types of data
  • Increased spending on cloud infrastructure

Mizuho sees these trends leading to a potential 20% year-over-year growth in AWS spending.

The analyst view presented suggests strong demand for Amazon’s cloud services (AWS) specifically. Here’s a breakdown:

  • High Demand for Cloud Services: Mizuho’s “tipping point for cloud migration” refers to a surge in companies moving their data and applications to the cloud. This translates to high demand for AWS services.

  • Specific Factors Driving Demand: The analysts point to faster sales cycles for AWS, indicating businesses are readily adopting cloud solutions. Additionally, the need for advanced AI applications, new data storage demands, and overall infrastructure upgrades are all fueling the demand for AWS.

It’s important to note:

  • This analysis focuses on AWS, a specific sector of Amazon’s business. While it suggests strong demand for cloud services, it might not directly reflect demand for physical products sold on Amazon.

For a broader picture of Amazon’s demand, you might consider researching:

  • Amazon sales figures: This can be found in their financial statements or news articles.
  • Consumer trends: Look for reports on popular product categories or buying habits on Amazon.
  • Third-party seller insights: Platforms like Jungle Scout offer data and insights on product trends on Amazon.

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